The Vietnam Asset Management Company (VAMC) sees non-performing loans
(NPLs) purchase off to a good start as it has set to handle 40-70
trillion VND (18.8-32.9 billion USD) of NPLs in 2013. The Saigon
Times Daily reports.
The Vietnam Asset Management
Company (VAMC) has seen encouraging signs of its endeavor to purchase
bad debts from credit institutions, with a contract signed on October 1
to buy trillions of debts and many more in the days to come, a senior
executive said.
Le Quoc Hung, vice chairman of VAMC,
told the The Saigon Times Daily in an interview that several contracts
to buy bad debts from joint-stock banks will be signed right this week.
He was speaking after signing a frame contract with the Vietnam Bank for
Agriculture and Rural Development (Agribank) to buy the first batch of
bad debts from the latter with the book value of over 2.4 trillion VND.
“After this deal with Agribank, both sides will sign
27 sub-contracts for every specific bad debt. And this is just the
first sign, since many more deals with other banks are being processed,”
Hung told the daily.
He cited for example a frame
contract to be inked with SCB covering bad debts with book value
amounting to hundreds of billions of VND, another to be signed with SHB,
and one with PGBank, the last one having book value of some 200 billion
VND but to be purchased at 170 billion VND.
Hung said VAMC had to screen through all the debts on offer to single out what debts to be purchased.
For example, for the frame contract signed with Agribank, VAMC looked
through the total amount of 3 trillion VND of bad debts, and picked out
only 1.7 trillion VND for the agreement.
Asked to
comment on the quality of bad debts, Hung said some are really bad, but
there are also many that should not be hastily sold. “I have looked at
some debts and mortgaged assets that are really valuable once the market
recovers, so it will be regrettable if such assets are offloaded in a
rush,” he said.
He also noted that banks are
changing for the better their attitude toward VAMC, as more lenders are
approaching the company with numerous offers. “Initially, we had to
contact credit institutions, but now they are coming to us. They are
more open and cooperative, which can be seen as initial but encouraging
results,” he said.
VAMC has received hundreds of
dossiers from banks wanting to sell between 500 and 700 bad debts. “I
feel assured of the target to buy back bad debts with book value of 30
trillion VND within this year.”
Commenting on the
capacity to liquidate bad debts, Hung said many international
organizations have approached VAMC in recent times to buy debts.
However, the company will not offload all such bad debts, but will
retain a certain number, then restructure and improve them to render
more support to enterprises as debtors.
He likened
bad debts to patients that need to be hospitalised, and what is
important is to have good doctors and good treatments. “If bad debts
remain at VAMC like patients in hospital, that is no recovery at all.
What should be done is to improve the debts so that they can be
discharged from hospital,” he said.
Bad debts at
Agribank are the first purchased by VAMC, and the company will issue
special bonds with the total value of over 1.7 trillion VND for this
contract. Mortgaged assets in the contract have the total value of over
3.6 trillion VND.
These debts have met conditions
required by the Circular No. 19/2013 on bad debt trading and handling,
the source said. VAMC targets to issue 35 trillion VND worth of special
bonds to buy bad debts from now to the end of this year.-VNA