HÀ NỘI – The Việt Nam Asset Management Company (VAMC) could meet a target to recover VNĐ30 trillion (US$1.339 billion) of bad debts this year, VAMC Deputy General Director Nguyễn Văn Thắng said.

Thắng said that VAMC has so far this year recovered VNĐ11 trillion of bad debts, or a third of the annual target, however, the recovery often increases sharply in the last months of the year.

According to VAMC, it has bought VNĐ251 trillion of bad debts from credit institutions since it was established in 2013. Of the total, roughly VNĐ30 trillion was recovered.

The recovery of bad debts has also increased year to year with VNĐ5 trillion reported in 2014, VNĐ12 trillion in 2015 and some VNĐ30 trillion expected in 2016.

According to the State Bank of Việt Nam’s statistics, the bad debt ratio of Việt Nam’s banking system, as of June 31, fell to 2.58 per cent from 2.78 per cent at the end of May.

The decline came mainly from debtor repayments, moving the debts to the VAMC, risk provisions, and increasing outstanding loans.

Total bad debts handled stood at VNĐ59.71 trillion in the first half of this year, 14.55 per cent lower year-on-year, SBV reported, based on final figures from the VAMC and financial institutions.

Of the total, debtors repaid VNĐ30.97 trillion while VNĐ8.88 trillion were moved to the VAMC, and financial institutions used VNĐ7.24 trillion in risk provision to handle bad debts.

The government has for the past few months also issued some regulations related the debt trading market which is expected to boost debt handling next time. – VNS