VAMC cuts rates on NPLs denominated in euros, dong
VAMC cuts rates on NPLs denominated in euros, dong
The Viet Nam Asset Management Company (VAMC) has cut the applicable interest rates by 0.3 per cent of the Vietnamese dong and the euro for non-performing loans (NPLs) purchased from credit institutions.
Accordingly, the interest rate on NPLs denominated for the dong is reduced to 9.6 per cent per year while the rate on NPLs in the euro is 5.4 per cent per year, effective in the fourth quarter this year.
However, the interest rate on NPLs denominated in the US dollar in the fourth quarter this year remains unchanged at 4.3 per cent per year.
According to the State Bank of Viet Nam's regulations, the VAMC is required to review and adjust the interest rates applied to the purchased NPLs in keeping with the repayment capacity of the borrowers, the interest rates prevalent in the market and based on the agreement with customers. Those interest rates will be publicised by the VAMC quarterly.
This is the sixth time the VAMC has announced an adjustment in interest rates applicable to the purchased NPLs. The company had adjusted interest rates for the first time during the second quarter of 2014, when it decided to significantly cut interest rates on the bought NPLs in dong from 15 to 18 per cent per year to only 10.7 per cent per year.
In the third quarter this year, the VAMC kept unchanged the interest rates of 9.9, 4.3 and 5.7 per cent applicable to the purchased NPLs denominated in dong, US dollar and the euro, respectively.
The VAMC acquired VND90.23 trillion (US$4 billion) in bad loans at book value of VND82.73 trillion ($3.69 billion) from credit institutions till October 20, 2015, in exchange for special bonds.
The accumulative amount of bad debt the VAMC has purchased since its launch in 2013 totals VND225.6 trillion ($10.07 billion).
