|This is the fourth time VAMC has announced an adjustment in interest rates applicable to the purchased NPLs. — Photo cafef.vn
HA NOI (VNS) — The Viet Nam Asset Management Company (VAMC) intends to cut the applicable interest rate for purchased non-performing loans (NPLs) in US dollars from 4.5 per cent per annum to 4.3 per cent.
However, interest rates on NPLs denominated in Vietnamese dong and the Euro will remain unchanged at 9.9 per cent and 5.7 per cent per annum, respectively.
The new interest rates will be applied during the second quarter of this year, from April 1 to June 30.
As per Circular 19, the State Bank of Viet Nam requires VAMC to review and adjust (reduce) 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 VAMC quarterly.
This is the fourth time 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.
During the third quarter of 2014, VAMC kept interest rates on NPLs in dong unchanged, but slashed interest rates on debts denominated in the US dollar and the Euro.
In December 2014, VAMC cut interest rates applicable in the first quarter of 2015 from 10.3 per cent per year to 9.9 per cent per year for NPLs denominated in the dong and 4.7 per cent per year to 4.5 per cent for NPLs in the US dollar, while keeping the rate for NPLs in the Euro unchanged at 5.7 per cent per year.
VAMC plans to buy NPLs worth VND100 trillion (US$4.76 billion), or 2.5 per cent of banks' total outstanding loans, this year.
Last year, VAMC bought NPLs worth about VND96 trillion ($4.57 billion), raising the total bad debts it had purchased from credit institutions to VND135 trillion ($6.43 billion), or 3.4 per cent of the total outstanding loans. — VNS