Bad debt settlement company for banks earns 165 billion VND in profit in 2022

Vietnam Asset Management Company (VAMC) is a special enterprise established and operating with the responsibility of handling bad debts and promoting credit growth for the economy .

VAMC was established due to the risky nature of banking credit activities, bad debt is always an existing problem, existing objectively, especially in the context of bad debt increasing at a very high level in the 2010s, causing the economy to face many difficulties in capital sources.

Accumulated from its establishment to the end of 2016, VAMC has purchased debts using secured bonds with a total value of issued bonds reaching VND 245,878 billion, equivalent to VND 275,565 billion of bad debt on the balance sheet, contributing to bringing the bad debt ratio on the balance sheet of the banking system down to below 3% by the end of 2016.

By 2017, VAMC had proposed to the State Bank and the Government to increase its charter capital to have financial resources suitable to the requirements of debt trading and settlement activities according to market value in each period.

Specifically, VAMC has been approved to increase its charter capital from VND500 billion to VND2,000 billion. By 2019, VAMC has been approved to increase its charter capital to VND5,000 billion, with the orientation to continue increasing VAMC's charter capital to VND10,000 billion in the coming time.

Currently, VAMC's main source of revenue comes from the results of debt trading activities at market value.

In the purchase and sale of bad debt at market value, from 2017 to present, VAMC has purchased debt with a total purchase price of nearly VND 13,000 billion and has recovered about VND 9,700 billion.

If previously the main source of revenue came from the amount VAMC received on debts purchased with secured bonds, now the main source of revenue of VAMC comes from the results of debt trading activities at market value.

From 2017 to present, VAMC's annual revenue has reached over 2,000 billion VND, dozens of times higher than the previous period (in which, in 2021, revenue reached over 3,000 billion VND).

Annual profits have increased from 2017 to present. If in 2017 – the first year of implementing debt trading activities at market value, VAMC's profit only reached 16 billion VND, then by 2022, VAMC's profit had reached 165 billion VND.

With the business results since implementing the debt trading activities at market value mentioned above, since 2017, VAMC's financial situation has also changed fundamentally.

Instead of only having revenue from management fees, debt collection from secured bonds and no profit in the period 2016 and before, since 2017 VAMC has balanced revenue and expenditure and has increasingly high profits through debt trading activities at market value .

Source: https://www.nguoiduatin.vn/cong-ty-xu-ly-no-xau-cho-cac-ngan-hang-lai-165-ty-dong-nam-2022-a612118.html