ACB general director Do Minh Toan told the Daily that the bank will transfer three packages of original bad debts worth VND500 billion each to VAMC.
As the year 2013 is nearing the end, only two packages could be transferred within this year. The bank expects to sell the final debt package to the company in early 2014.
All the bad debts are not related to the real estate sector. Selling out the VND1.5 trillion debts, ACB expects to cut its bad debt ratio from 3.1% in late November to 2%, Toan said.
However, around 40% of ACB’s debts were made in foreign currencies. Given the current rules, if VAMC buys foreign currency loans, it will have to convert the loans into dong, so banks will have to buy foreign currencies in the market to maintain their forex positions.
Some people have raised concerns that the regulation will affect stability of the dong-U.S. dollar exchange rate.
Nguyen Quoc Hung, vice chairman of VAMC, said that the enterprise is considering foreign currency debt purchases from credit institutions with value amounting to tens of millions of U.S. dollars.
“VAMC has not bought any bad debts in foreign currency as we are waiting for instructions from the central bank. We have plans to buy the first foreign currency debts at the end of this year but will find ways to prevent any impact on the exchange rate,” Hung said.
For the bad debt banks have transferred to VAMC, most of it has been made to purchase equipments for high-class construction projects.
Concerning impacts of foreign currency debt purchases on the exchange rate, Hung said that there is no good reason to worry about that. Only when VAMC buys huge debts worth hundreds of millions or billions of U.S dollar, the forex rate stability will be affected.
In addition, VAMC will seek supports from the central bank with purchase of foreign currency loans to avoid impacting on the forex market.
VAMC has bought some loans in gold, which has also been converted into dong. However, there have been no impacts caused to the gold market.
VAMC so far has bought VND21.8 trillion worth of bad debt with special bonds, equivalent to VND27 trillion of original debt. The enterprise expects to buy debts from 28 to 29 credit institutions this year, Hung added.