Asia Commercial Bank (ACB) is still struggling with some VND5.7 trillion (US$256.3 million) in bad debt caused by six enterprises associated with its former vice chairman Nguyen Duc Kien, heard the lender’s general meeting last week.

Shareholders at the meeting raised questions about the debt caused by the six businesses and risk provisions.

ACB general director Do Minh Toan said that mortgaged assets of the firms are enough to settle their loans.

Toan said debt settlement solutions were approved by the central bank and that the bank expects to recover around VND2 trillion this year.

ACB plans to set aside VND1 trillion for risk provisions for overdue loans of the six firms, including VND200 billion in the first quarter of this year.

ACB earned profit of nearly VND3 trillion in 2015 but used over half of the sum to deal with certain matters.

Leaders of ACB said the bank’s performance last year improved but a couple of problems remain to be solved. 

ACB said a VND400 billion loan borrowed by Vietnam Construction Bank (VNCB), which was acquired by the central bank at VND0, was overdue.

Since the final quarter of 2015, VNCB and ACB have coordinated to restructure the debt in five years under the guidance of the central bank.

Part of the loan with an annual interest rate of 2% will be collected annually until all the amount is recovered by end-September 2020.

The collateral is VNCB’s head office building valued at over VND400 billion.

Last year, ACB set aside VND176 billion for risk provisions and if the loan is put in group 1 in quarter two of this year, ACB will not have to use provisions for it.

Regarding a VND772-billion loan taken out by Global Petroleum Bank (GPBank), another ailing bank acquired by the central bank at VND0, ACB acquired fixed assets to settle the debt.

By April 7, ACB had acquired debt of over VND500 billion, transforming it into one with an interest rate of 9.2% per annum. 

Regarding the remaining VND272 billion, ACB is conducting procedures to buy assets owned by GPBank no later than the end of quarter three as approved by the central bank.

This year, ACB will review its deposits on the interbank market which have not created profit and turn them into other assets to earn money.