Three banks sell VND840 billion of bad debts

The lenders were Saigon Commercial Bank, Saigon-Hanoi Bank and PGBank. They are also among the first banks to sell bad debts to VAMC after Agribank.

A source from VAMC said that over VND840 billion worth of special bonds will be issued to buy the debts, which have the total book value of over VND1.1 trillion.

As the total original debt minus risk provisions makes the special bond value, these figures mean that these banks have deducted VND357 billion for risk reserve funds for these loans.

VAMC said that it will sign contracts to buy debts with the total value of over VND1 trillion with one or two banks this week. It will also sign more specific sub-contracts to buy debts of Agribank and the three banks mentioned above.

The enterprise signed the first bad debt purchase contract with Agribank on October 1. VAMC expects to buy around VND10 trillion worth of bad debts by the end of the month.

Agribank, which is said to have the highest bad debt ratio in the banking system, expects to sell at least VND5 trillion worth of book-value bad debts to VAMC before the end of the year. The bank now has to handle around VND21 trillion worth of bad debts.

A leader of VAMC said that the huge debts of troubled shipping group Vinashin at credit institutions have not yet been targeted by the enterprise.