The introduction of Resolution 42, which provides special pilot treatment of bad debts at credit institutions, played an important role in VAMC`s recent positive performance.

The central bank-run Vietnam Asset Management Company (VAMC) purchased a total of VND279.7 trillion (US$12.1 billion) worth of non-performing loans (NPLs) from VND279.7 trillion (US$12.1 billion) with special bonds from its establishment in mid-2013 to end-2017, VnExpress cited a report of the company as saying. 

On average, VAMC, dubbed as the bad debt bank, purchased VND56 trillion (US$2.41 billion) annually worth of NPLs with special bonds from credit institutions. 

The purchase reached its peak in 2015 with VND100 trillion (US$4.31 billion). 

During the 2013 - 2017 period, VAMC recouped VND81.2 trillion (US$3.5 billion) and sold VND14.29 trillion (US$616.8 million) worth of bad debts. The debt management firm's revenue in this five-year period reached over VND296 trillion (US$12.78 billion). 

The result contributed significantly to bringing the bad debt ratio in the banking system to below 3%, while supporting enterprises during the debt-restructuring process, getting exemption from and reduction of loan interest, and accessing banks' loans, stated VAMC.

The introduction of Resolution 42 adopted by the National Assembly in mid-2017 also played an important role in VAMC's recent positive performance. The resolution, which came into effect last August, provides special pilot treatment of bad debts at credit institutions.

Substantially, VAMC's revenue and pre-tax profit in 2017 reached the highest levels since the company's establishment, standing at VND89.1 trillion (US$3.84 billion) and VND20.47 trillion (US$883.7 million), respectively. 

In 2018, VAMC set target of purchasing bad debts worth VND27 trillion - VND32 trillion (US$1.1 billion - US$1.4 billion) with special bonds and VND3.5 trillion (US$153 million) with cash at market value, while handling bad debts worth VND24.9 trillion (US$1.1 billion). 

According to the plan to restructure credit institutions in association with handling bad debts in the 2016 - 2020 period approved by the prime minister, VAMC's charter capital will be increased from VND2 trillion (US$86.35 million) to VND5 trillion (US$215.8 million), while the company remains 100% state owned.

Hanoitimes