VAMC wants its registered capital increased

Friday, Jan 17, 2014 18:02

VAMC had bought VND38.9 trillion (US$1.85 billion) worth of bad debts at a cost of VND32.4 trillion ($1.54 billion) in the form of special bonds from 34 credit institutions till December 31, 2013.— Photo cafef

(Biz Hub) The Vietnam Asset Management Company (VAMC) will continue to face pressure to help credit institutions restructure non-performing loans and overcome their difficulties this year.

The company's Deputy Chairman Nguyen Quoc Hung speaks to Tin Tuc (News) newspaper about this issue.

Can you tell us about VAMC's plan for 2014?

Nguyen Quoc Hung.— Photo baodautu

This year will bring full pressure on VAMC. But we have made plans to buy bad debts worth between VND70 trillion and VND100 trillion with VAMC's special bonds this year. We will complete the project of buying bad debts at the market price. However, there are many issues that need to be resolved to make the project a reality.

We have recently proposed to the government that VAMC's registered capital should be increased from VND500 billion to VND2 trillion or capital should be mobilized from foreign sources. We are still undecided as there are many legal barriers to buying and selling bad debts, especially regarding the security assets of real estate. If the enterprises find it impossible to recover, how will we solve the problem? How can we sell them? We will try our best but we need support from the government, ministries and sectors to complete the legal procedures. By doing so, foreign investors will feel secure when they take part in buying, selling and resolving bad debts.

There are many domestic and foreign investors who intend to buy bad debts from VAMC. However, many legal barriers need to be resolved before selling bad debts, such as ownership of assets, particularly foreign investors' ownership in real estate assets and the foreign investors' share in ownership of enterprises.

How do you view SBV's circular 02/2013/TT-NHNN which requires commercial banks to classify bad debts into various groups. If the circular comes into effect from June 2014, what will be the volume of bad debts?

In my opinion, circular 02,which was issued in June 2013, but then was put off till June 2014, has helped credit institutions' operations to become more stable. Although there are many difficulties, I think it should be put into effect on time. The implementation of circular 02 will give a chance to credit institutions to take a relook at their bad debts and be responsible for resolving them.

I think if the circular come into effect on time, the volume of bad debts bought by VAMC will increase because many debts could be bad debts. However, SBV is considering a step-by-step itinerary to put the circular into operation.

How did VAMC tackle bad debts last year?

VAMC had bought VND38.9 trillion (US$1.85 billion) worth of bad debts at a cost of VND32.4 trillion ($1.54 billion) in the form of special bonds from 34 credit institutions till December 31, 2013.

The company began buying bad debts from credit institutions from October 1, 2013. The first bank which sold its bad debts to the company was the Agriculture and Rural Development Bank (Agribank) which had debt worth VND2.45 trillion. We have bought bad debts not for putting them over there or for selling them. Our responsibility is that after buying them, we will classify and restructure the debts and then cooperate with banks to help enterprises overcome difficulties and carry out their business plan. — VNS

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