Vietcombank plans to support restructuring of ailing bank

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Vietcombank plans to support restructuring of ailing bank

Vietnam News - 2/10/2017 9:41:41 AM

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Vietcombank has submitted to the State Bank of Việt Nam’s governor a plan to support the restructuring of an ailing bank.

Vietcombank’s chairman Nghiêm Xuân Thành told Deputy Prime Minister Vương Đình Huệ at a recent meeting: “After approval by the governor and the Government, Vietcombank pledges to be a pioneer in restructuring successfully an ailing bank as entrusted by the Government.”

The Vietcombank representative did not reveal the name of the ailing bank that it will help restructure.

Previously, the central bank entrusted Vietcombank to support the Vietnam Construction Bank (VNCB) in a number of fields, such as capital resources, monetary business, credit and corporate governance.

According to Vietcombank, its support to VNCB meets the country’s current legal regulations.

At a meeting with Vietcombank late last year, SBV governor Lê Minh Hưng directed Vietcombank to take part in the restructuring of other ailing banks, but ensured that the Government would issue detailed policies in this regard to make certain the bank was not affected by it.

Hưng said Vietcombank made significant achievements last year in settling bad debts, which has brought its bad debt ratio down to 1.45 per cent.

Last year, Vietcombank was also the first bank to buy back all non-performing loans (NPLs) worth VNĐ4.3 trillion (US$189.4 million) it sold to the Việt Nam Asset Management Company three years sooner than planned.

However, Hưng asked Vietcombank to boost the settlement of bad debts by selling mortgaged assets as Vietcombank’s settlement of bad debts was mainly through provisions, which reduced the bank’s profits. Last year, Vietcombank spent some VNĐ8.2 trillion on provisions, which was equal to 121 per cent of its total NPLs.

After gaining a record high pre-tax profit of VNĐ8.2 trillion in 2016, Vietcombank has targeted pre-profit figure of VNĐ9.2 trillion in 2017, 12 per cent higher than last year.

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