VAMC: The maximum special bonds issued in 2020 at 15tr dong, promoting the establishment of debt trading platform

02-Jun-2020 Intellasia | Vietnam Finance | 6:02 AM Print This Post

According to a report on Business Production and Development Investment in 2020, Vietnam Asset Management Company (VAMC) said that in 2019, the Company had purchased 381 debts of nine credit institutions. The total balance of 20.544 trillion dong of on-balance sheet loans, with a price of 19.846 trillion dongs, reaching 99.23 percent of the plan approved by the State Bank of Vietnam (SBV).

Accumulating from its inception to December 31, 2019, VAMC had purchased bad debt through special bonds with a total balance of 359.393 trillion dong of internal debt, a debt purchase price of 327.413 trillion dong.

Along with that, this enterprise had also purchased bad debts at the market value of 37 debts with a total purchase price of 2.247 trillion dong, contributing to solving more than 2.131 trillion dong of bad debts for credit institutions. Accumulated from 2017 to December 31, 2019, VAMC had purchased bad debts at the market price of 8.013 trillion dong in the balance sheet balance with the purchase price of 8.207 trillion dong.

During the year, VAMC processed 69.778 trillion dong of principal debt (reaching 140 percent of the plan approved by SBV). Accumulated to December 31, 2019, it was estimated at 258.205 trillion dong of principal repayments. The total debt collection in 2019 was 32.273 trillion dong, accumulated from 2013 to December 31, 2019, which reached 151.619 trillion dong.

At the same time, VAMC also exempted 1.019 trillion dong of interest.

In 2020, VAMC planned to issue a maximum of 15 trillion dong of special bonds, besides, buying 5 trillion dong of bad debt at market price. The outstanding principal was expected to be 50 trillion dong.

VAMC said that it would coordinate with credit institutions to buy special bonds for weak credit institutions, which might pose a risk to the system, having a bad debt ratio higher than three percent with the scope and number of bad debts following the decision of SBV. Along with those were focusing on buying at market prices for bad debts that VAMC bought with special bonds; reviewing the list of debts in the internal and off-balance sheet accounts at credit institutions; selecting feasible debts to be handled after buying them to have a basis for proposing the purchase of debts at market prices.

This enterprise also intended to submit to SBV and competent agencies for consideration and approval to increase its charter capital to 10 trillion dong according to the content of the VAMC Restructuring and Capacity Building Scheme for the 2017-2020 period, with directions to 2022, issued together with Decision No.28/QD-NHNN dated January 5, 2018, of the SBV’s Governor and the Scheme on restructuring the credit institutions system associated with dealing with bad debts in the 2016-2020 period according to the Decision No.1058/QD-TTg of the prime minister on July 19, 2017.

Another critical task of VAMC this year was developing the debt trading market, establishing and operating the VAMC Debt Exchange.

Accordingly, this enterprise aimed to promote the establishment of the VAMC Debt Exchange to manage and exploit information about debts/assets; organise the implementation of activities of the Debt Exchange; promote the establishment of AMC Club to create a forum to exchange experiences, share information, connect investors and proceed to build a centralised bad debt trading market.

At the same time, the Company was proactively seeking to expand partners, investors to advise, buy and sell non-performing loans and collaterals of debts based on the classified loan portfolio, also, publicise the activities of buying and selling bad debts.

Besides, VAMC would deploy new operations such as guarantee, financial support for borrowers.

 


Category: Finance, Vietnam

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