|The Asia Commercial Bank (ACB) was the first bank to announce bad debts to VAMC. General director of ACB Do Minh Toan said the bank may sell up to VND1.5 trillion (US$71.5 million) worth of debt, 50 per cent of the bank's non-performing loans.— Photo petrotimes
HA NOI (VNS)— The Nam Viet Commercial Joint Stock Bank (Navibank) and Asia Commercial Bank (ACB) have lodged plans to sell non-performing loans to the Viet Nam Asset Management Company (VAMC).
The Deputy director of the State Bank of Viet Nam (SBV) chapter in HCM City, Nguyen Hoang Minh, revealed the news while speaking with the Saigon Times.
The official also confirmed Navibank planned to sell its bad debts at book value to the newly established VAMC, set up on July 26 by SBV to remove non-performing loans from Viet Nam's financial system.
The volume of the sale will be decided by the Board of Directors.
Navibank posted a bad debt ratio of 6.1 per cent, well above the 3 per cent limit. Under current regulations, the bank will likely be forced to sell excess non-performing loans to VAMC.
Initially, the Asia Commercial Bank (ACB) was the first bank to announce bad debts to VAMC. General director of ACB Do Minh Toan said the bank may sell up to VND1.5 trillion (US$71.5 million) worth of debt, 50 per cent of the bank's non-performing loans.
Toan said the sale of bad debt to VAMC would keep more money in circulation, adding that VAMC bonds were valid for five years and provide ample time to ease pressure on bad debts.
However, Minh said the bank had delayed plans to sell to VAMC as the body had been unable to trade debts until regulation had been passed.
Experts are urging banks to sell their debts to VAMC to clear their balance sheets and access refinancing loans which only require a 20 per cent provision for bad debts per year.
According to the latest data from SBV, non-performing loans by the end of June decreased for the second consecutive month to 4.46 per cent of total credits, down 19 per cent from May this year. — VNS