VietNamNet Bridge - Given that the bad debt situation in
Vietnam is not considered as "tragedy" but foreign experts suggested
the Vietnamese government taking rapid and drastic solutions to deal with it.
For the first time in its 15-year
history, the Vietnam Business Forum (VBF) gave a lot of time for the
representatives of four wholly foreign owned banks in Vietnam to talk about non
performing loans (NPLs).
According to the head of the
VBF’s working group on banking, Mr. Louis Taylor, though NPL have become a
widely discussed issue in many forums, but the nature and seriousness of the
debts as well as the debt scale of the Vietnamese banking system is still the
thing that even the bankers do not know clearly.
"Banks have reported NPLs at
4.43%. The Governor said it is 8.8% but it is said that the figure must be
double," said Taylor, who is the General Director of Standard Chartered
Vietnam.
According to Taylor, if the
figure is 8.8%, the bad debt is around $12 billion, and if the loss percentage
in other markets - 40% - is applied, the amount of capital that banks may lose
can reach $7 billion, equivalent to 5% of GDP.
However, it is important to
identify who will bear the costs of NPLs: "The State, bankers or the both
sides," the group suggested.
General Director of Citibank
Vietnam, Mr. Brett Krause, said that in the process of restructuring bad debts,
it is a must to establish asset management companies (AMC). Thanks to these
companies, banks will not have to worry about handling bad debts to focus on
the main lines while they can have a lot of capital from the liquidation of
assets. Krause also said the existence of AMCs should be fixed, usually 5-7
years.
Experts also made suggestions to
the Government on the refinancing for banks. According to the CEO of HSBC
Vietnam, Mr. Sumit Dutar, the first thing to do is to sort out the banks that
work well for being supported. The remaining banks can be closed, after selling
good debts to AMCs.
In response to the above opinions
from foreign banks, at the VBF on December 3, State Bank of Vietnam’s deputy
governor Dang Thanh Binh spent a lot of time to talk about the results in
fighting inflation, stabilizing the exchange rate and restructuring banks.
Regards to NPLs, Binh said
Vietnam can accomplish the goal of reducing NPLs to 3% in 2015.
Translated by S. Tung
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