ASEAN KEY DESTINATIONS
Billions in bad loans resolved
Vietnam:The banking system has resolved roughly VND311.1 trillion (US$14.33 billion) of non-performing loans (NPLs) in 2012-14, accounting for 67 per cent of total NPLs reported in September 2012.
These results were recently reported by the State Bank of Viet Nam's governor, Nguyen Van Binh, to deputies of the National Assembly.
The ratio of NPLs had been reflected more accurately and transparently since late 2014, Binh said, adding that the NPL ratio had declined from 3.61 per cent in late 2013 to 3.25 per cent in late 2014.
Though the NPL ratio inched up in the first two months of this year to 3.59 per cent, it was still within the range of what was forecast, and had remained under control of the central bank, Binh said, explaining that NPLs often increased in the first months of the year, before declining sharply at the year end.
Binh said that the central bank would continuously instruct commercial banks and credit institutions to handle NPLs strictly through debt classifications and risk provisions in accordance with legal regulations.
The central bank has targeted to resolve at least 60 per cent of the total number of NPLs that they are supposed to handle in 2015 by June 30. Further, they have to transfer at least 75 per cent of the total debts that they assign for sale to the national debt dealer, Viet Nam Asset Management Company (VAMC), this year.
Additionally, the central bank is to take bold measures, including restrictions on profit sharing, to punish credit institutions and commercial banks whose NPLs are large and inactive.
VAMC chairman Nguyen Quoc Hung said that VAMC estimated that it had bought roughly VND40 trillion ($1.84 billion) of NPLs at their book value during the first five months of this year, out of VND80 trillion ($3.68 billion) planned for the entire year. More than 90 per cent of the debts bought by VAMC were mortgaged by real estate assets.
The VAMC's NPL purchase, to date, has been relatively smooth, Hung said, adding that all credit institutions, including State-owned commercial banks, had so far suggested they would sell their NPLs to VAMC.
The Bank for Investment and Development of Viet Nam (BIDV), to date this year, sold roughly VND3 trillion ($138.24 million) of its NPLs to VAMC, out of VND8 trillion ($368.66 million) planned for the entire year.
Vietinbank has also plans to sell roughly VND4 trillion ($184.33 million) of NPLs to VAMC this year, while Vietcombank expected VND1 trillion ($46.08 million) in NPLs to be sold to VAMC in the second quarter of this year.
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