Some banks are speeding up the recovery of non-performing loans (NPLs) this year despite the impact of the COVID-19 pandemic.
The Vietnam Asset Management Company (VAMC) targeted to settle bad debts worth totally VND50 trillion (US$2.15 billion) this year.
The Southeast Asia Joint Stock Commercial Bank (SeABank) has completed the early redemption of all special bonds at the Vietnam Asset Management Company (VAMC), thereby helping the bank proactively monitor and handle bad debts.
Profit growth of Vietnamese banks in 2019 is forecast to be lower than last year, but experts say this should not be cause for concern.
The Vietnam Asset Management Company (VAMC) is planning to develop a new strategy for buying and selling bad debts in Vietnam this year, in which it will play a central role to promote the development of the debt trading market.
The Vietnam Asset Management Company (VAMC) plans to handle some 50 trillion VND (2.14 billion USD) worth of bad debts in 2019, and issue special bonds to purchase 20 trillion VND (856 million USD) of non-performing loans.
Local cement company Cong Thanh Group’s trillion-VND debts at Vietinbank will be shifted to Vietnam Asset Management Company (VAMC).
Many banks had to sell a large amount of NPLs to the Viet Nam Asset Management Company (VAMC) in the past few years to meet the central bank’s requirement of keeping their NPL ratio below 3 per cent of all outstanding loans.
Despite the central bank’s tightened monetary policy, many banks reported good business performance last year thanks to improved bad debt resolution and rising income from services.
The Vietnam Asset Management Company (VAMC) plans to resolve at least VND140 trillion (US$5.95 billion) of non-performing loans (NPLs) from now until 2020, of which VND34.5 trillion will be settled this year.
Banks are putting non-performing loans (NPLs) and collateral of default borrowers on auction in a move to speed up the resolution of bad debts.
Settling non-performing loans (NPLs) has been easier since the application of Nation Assembly’s Resolution 42 a year ago, but detailed guidance is still needed to make the use of the regulation smoother, industry insiders said.
Despite some corrections in the first half, bank tickers are expected to lead the market in the second half, buoyed by dwindling provisioning and upbeat profit prospect.
The ratio of the non-performing loans (NPLs) at commercial banks fell from 3.61% at the end of 2013 to 2.18% at present, according to Chairman of the Vietnam Asset Management Company (VAMC) Nguyen Tien Dong.
Many banks have reported impressive profit growth in the first half of 2018, compared to the same period last year, thanks to the high credit growth and the improvement from the retail banking segment.
Some Vietnamese banks have made meaningful progress in the resolution of legacy problem assets, a positive credit for the sector, Moody’s said on February 5.
2017 was a good year for Vietnam’s banking sector with big profits for many banks and a decreased bad debt ratio.
Sacombank and VP Bank are leading the list of banks with the highest NPL (non-performing loans) ratios.
The M&A deals made in 2017 are expected to have the value of US$2 billion, and the same value or higher has been predicted for 2018.
With Christmas coming, Thai-based Kasikorn Bank has set its sights higher than just gaining a strong foothold in Vietnam – it also has an eye on the local bad debts market.