VietNamNet Bridge – A lot of banks have affirmed that they are willing to sell bad debts to the Vietnam Asset Management Company (VAMC). However, no official deal has been made so far, since banks still “listen to the news.”

Domestic banks stay indecisive

ACB remains the only commercial bank which has sent word so far intimating that it will sell VND1.5 trillion worth of bad debts to VAMC.

Do Minh Toan, General Director of ACB, said the bank now has VND3.09 trillion worth of bad debts, which amounts to 2.9 percent of the outstanding loans.

However, Toan said the sum of debts is just the estimates by ACB, while the two sides have not had any meetings to discuss the trade deals.

“If selling bad debts to VAMC, banks would be “free” of the bad debts for at least five years, and the time long enough for them to ease the pressure. The money from the debt sale would be used for doing business which can bring profits. Therefore, though we are profuse in liquidity, we are still considering selling bad debs,” Toan said.

Other banks keep silent about their plans. The representative of Agribank, a state owned enterprise with the high bad debt ratio has affirmed it will sell debts, but has declined to give the exact figure.

SHB, which has taken over Habubank, now takes on a huge bad debt, estimated at 8 percent by the end of the first quarter. It will have to sell the bad debts, but it’s still unclear how much to sell.

BIDV and Sacombank have both also affirmed they would sell debts, but also still keep the wait-and-see attitude.

Dinh Tuan Minh, an analyst, has also noted that banks remain indecisive to sell debts to VAMC since they still cannot find out if they can benefit from the deals.

VAMC is not the only buyer

VAMC is believed to have a lot of “rivals” who would compete with it to buy bad debts from banks.

John Sheehan, the former Managing Director of Lehman Brothers, affirmed at a workshop held recently in Hanoi that a lot of foreign investors are willing to buy Vietnamese banks’ bad debts. The only thing that makes them reluctant to do that at this moment is lacking a legal framework on the issue.

Foreign financial institutions have many times expressed their intentions of buying Vietnamese bad debts. Most recently, in an interview given to Bloomberg, VAMC’s General Director Nguyen Huu Thuy also revealed the plan of VAMC to call for foreign capital.

Thuy named some foreign investors who have sent word intimating that they want to buy Vietnamese bad debts. These include the big names such as IFC, an arm of the World Bank, TPG Growth LLC, a subsidiary of a private investment firm, and Standard Chartered.

IFC has confirmed that it had meetings and discussed with VAMC on the debt trade, while the other two units have declined to make comments on the issue.

However, Vietnam has not got ready enough to receive the huge foreign capital, as its legal framework and the infrastructure have not been good enough.

The majority of foreign investors have been interested in the bad debts mortgaged by real estate. They are mostly from the US.

VNE