SBV determined to bring NPLs down to below 3% by end of 2015

HANOI – The State Bank of Vietnam has asked that credit institutions resolve at least 60% of their bad debts scheduled for clearance in 2015, and sell at least 75% of their 2015 bad debt under a sale plan to the Vietnam Asset Management Company by June 30 this year. Meanwhile, SBV is working with the Government to improve the legal framework and assist the VAMC in resolving NPLs more effectively.

The SBV instruction gave banks and the VAMC a strict schedule to resolve bad debts as SBV wants to ensure that the banking sector is able to meet SBV’s ambitious target of bringing down NPLs to below 3% by the end of 2015.

Commenting on the move, the private sector Vietnam Asset Management (VAM) said it believes banking reform progress in Vietnam will accelerate from now rather than being left until the last few months of the year, as is the norm.

VAM adds that the traditional stock market rally in the first month of this year differs in that it is firmly backed by an evidently improving macro economy, and not just sentiment.
 
“Amidst weak consumption, the significant decline in fuel price will be a boon to manufacturers, and we think it will soon be passed on to consumers in terms of lower prices - to further stimulate aggregate demand,” VAM says. “Overall, we maintain our positive view on the economic outlook in 201,5 and will continue to like stocks that would benefit from the economic turnaround.” www.vietnamam.com (ATI).