Vietnam does not need VND100 trillion to purchase bad debts from banks as had been previously suggested since the problem can be solved with various financial tools, a central bank official said Thursday.
Some people said an asset management company, if established by the government, would need a large amount of money to buy bad debts, but that is not the case, said Nguyen Huu Nghia, interim chief inspector of the central bank.
Even if the total value of bad debts reached VND100 trillion, it does not mean the central bank has to spend the same amount of money to buy them, Nghia told the press, refusing to comment further on the issue since there has not been any official plan to set up such a debt trading company.
The bad debt value in fact amounted to VND202 trillion (US$9.69 billion), or 8.6 percent of total loans in the banking system, at the end of March, according to the State Bank of Vietnam. Previously, the central bank estimated the ratio was 4.47 percent at the end of May, based on banks' data.
Nghia said lenders tended to understate their bad debts, causing this statistical gap. Moreover, central bank inspectors also took into account the fact that some clients borrowed from several banks at the same time, which made the loans more risky for the lenders.
Most of the non-performing loans came from the construction sector due to the downturn on the real estate market, he said.
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