Bank for Investment and Development of Vietnam (BIDV) plans to sell VND8 trillion (US$371 million) worth of bad debts at book value to Vietnam Asset Management Company (VAMC) this year after disposing of VND6.1 trillion-plus bad debts in 2014.

In end-2014, BIDV reported total outstanding loans of over VND463 trillion (US$21.4 billion) with bad debts accounting for 2.03%, down from 2.37% a year earlier.

Speaking to shareholders at an annual general meeting in HCMC on Friday, BIDV chairman Tran Bac Ha said BIDV was among the State-run banks with the highest bad debt ratio in 2013.

BIDV did not take out inter-bank loans to improve the ratio at the end of 2014. The bank classified debts following international practices, he said. This year it targets a bad debt ratio of 2.5%.

BIDV general director Phan Duc Tu said that the bank’s credit risk provisions totaled nearly VND8.5 trillion in December 2014. This year, the figure is projected to fall to VND8.1 trillion. Its profit target for the year is VND15 trillion.

BIDV reported credit growth of 4.3% by the end of the first quarter. The bank expects credit to rise 16% this year and will see it edging down after its merger with Mekong Housing Bank (MHB).

As for this merger, Ha said, both sides will announce their merger on May 25. After that, BIDV will revise business plans, assets and chartered capital. The new bank could obtain credit growth of 13%, Ha said.

MHB has total assets of around VND40 trillion compared to VND650 trillion at BIDV. Ending 2014, MHB said bad debt accounted for 2.71%, or VND812 billion, of total outstanding loans, up from 2.65% a year earlier.