At a meeting yesterday, Vietinbank chairman Nguyen Van Thang said that in 2017 his bank would focus on settling bad debts and would buy all bad debts that it sold to VAMC.

In the context of fierce competition among banks, Vietinbank would completely settle the bad debts in 2017 instead of 2018 as planned earlier, Thang said.

From 2007 to 2010, Vietinbank settled nearly VND10 trillion (US$440.52 million) of bad debts through a provision of risk loans as well as recoupment and sales of bad debts.

By the end of 2016, Vietinbank’s bad debt ratio was kept under 1 per cent. The bank’s outstanding loans in 2016 reached VND720 trillion, up 18 per cent against 2015.

Vietinbank posted a profit of VND8.25 trillion in 2016, up 12 per cent against 2015, while its total assets by the end of 2016 also surged by 22 per cent to VND947 trillion.

Earlier, Vietcombank’s chairman Nghiem Xuan Thanh had also said that in 2017, his bank would buy all VND4.3 trillion of NPLs that it sold to VAMC, three years sooner than as planned.

Thanh said that Vietcombank would settle bad debts itself through the use of provision, hoping that as and when the bad debts are recouped the bank’s financial capacity would improve, helping it continuously to cut lending interest rates.

At the meeting with Vietcombank last week, Governor of the State Bank of Viet Nam Le Minh Hung told Vietcombank to focus on settling NPLs through the sale of mortgaged assets.

Hung said Vietcombank made significant achievements last year in settling bad debts, which has brought its bad debt ratio down to 1.45 per cent, but these settlements were mainly through provisions, which reduced the bank’s profits. Last year, Vietcombank spent around VND8.2 trillion for provisions, which equalled 121 per cent of its total NPLs. The bank’s pre-tax profit hit a record high of VND8.212 trillion in 2016, up 23.4 per cent against 2015.

The Governor also instructed the bank to prioritise the completion of its restructuring project and determine its position in the region in the next five to 10 years.

The bank will also have to take part in the restructuring of other ailing banks, but the Government would issue detailed policies in this regard to ensure the bank is not affected by it, Hung said.

Nguyen Duc Kien, deputy head of the National Assembly’s Economic Committee, said that the move of buying back bad debts showed that the business performance of the banks has been better.

With the move, Kien said, the pledge to settle bad debts of credit institutions with the use of the State budget at a minimum is becoming a reality. 

VNS