In late 2017 and early 2018, thousands of billions of dongs were retrieved by domestic banks, giving off signals of a new bad debt market being born.

Saigon One Tower in Ho Chi Minh City, the first target of VAMC’s debt recovery scheme

Specifically, in 2017 alone, Vietnam Asset Management Company (VAMC) teamed up with domestic commercial banks to reclaim a total of VND30.7 trillion through the bad debt resolving plan which exceeded the expected the plan’s annual target for 2017 and the actual outcome of the plan for 2016.

In July 2017, Sacombank recovered nearly VND5 trillion ($219.5 million) of debts sold to VAMC through property auctions. In September 2017, Agribank was reported to recoup around VND8 trillion ($352.1 million) through debt recovery.

In August 2017, VAMC issued a notice stating the seizure of secured assets worth VND7 trillion ($308.1 million) at Saigon One Tower JSC for the purposes of debt collection.

Doan Van Thang, general director of VAMC, said that over the last few months of 2017, numerous domestic commercial banks, such as Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) and Vietnam Bank for Agriculture and Rural Development (Agribank), pulled off the debt recovery as planned.

Talking about the debt collection plan, Sacombank’s representative asserted that in 2017 alone the bank resolved over VND19.66 trillion ($871 million) of bad debts and outstanding assets, of which VND15 trillion was recovered under the restructuring scheme.

Notably, the bank successfully retained VND9.2 trillion ($404.3 million) from selling clusters of industrial zones in the southern province of Long An as well as thousands of billions of Vietnam dong thanks to its bad debt transactions with VAMC.

Additionally, in late 2017, Vietnam Prosperity Joint Stock Commercial Bank (VPBank) was reported to regain approximately VND3 trillion ($132 million) from bad debts settlements.

In order to further strengthen the bad debts collection scheme, VAMC set the target of VND6.6 trillion in accordance with the current market price acquired from bad debt relocation.

In addition, the domestic asset management firm also committed to sort out at least VND140 trillion ($6.1 billion) worth of bad debts in 2017 through asset recovery and secured asset settlements.

VIR