Viet Nam's credit growth has reached about 6.73 per cent this year. — Photo cafef.vn

HA NOI (Biz Hub) ─ The Viet Nam Asset Management Company (VAMC) has so far bought about VND74 trillion (US$3.52 billion) in bad debts.

State Bank of Viet Nam (SBV) Deputy Governor Nguyen Thi Hong made this announcement at the Autumn Economic Forum held in the northern province of Ninh Binh last Saturday. Hong said the acquired debt amount reflected VAMC's great efforts which were made in spite of its limited resources.

But Do Thien Anh Tuan of the Fulbright Economics Teaching Programme reportedly replied that VAMC operations were apparently inefficient.

According to Tuan, until August, the company had purchased VND60 trillion ($2.86 billion) of about VND150 trillion ($7.14 billion) in total non-performing loans (NPLs) from credit institutions but was able to resolve only VND1.2 trillion ($57.14 million), or two per cent, of its purchased NPLs.

Tuan suggested that the SBV add more powers to the VAMC so it could rapidly deal with mortgage assets, especially property assets. He noted that the company was now largely dependent on the SBV in terms of policies and staff.

He also called for the enhancement of the VAMC's financial capacity, as its current equity of VND2 trillion ($95.24 million) was apparently insufficient for it to meet practical requirements. Creating a legal framework for the development of a debt trading market is also necessary, said Tuan.

Tran Dinh Thien, director of the Viet Nam Institute of Economics, said the VAMC needed to create a road map for resolving bad debts in a situation where economic restructuring remained slow and some fragile banks were still exposed to implicit risks in the banking system.

Hong said the SBV was revising a legal document on resolving bad debts while the VAMC was still trying to restructure and sell its purchased NPLs.

At the end of July, the NPLs accounted for 4.11 per cent of total outstanding loans in the economy, slightly down from the 4.17-per cent level recorded at the end of June.

Bad debts are still increasing as medium- to long-term loans remained significant and businesses continued to struggle, she added.

National credit growth has so far reached about 6.73 per cent, or more than half of the expected total annual level of 10 to 12 per cent. — VNS