Moody’s optimistic about bad debt resolution in VN’s banksSome Vietnamese banks have made meaningful progress in the resolution of legacy problem assets, a positive credit for the sector, Moody’s said on February 5. Additionally, enhanced legal frameworks, such as Resolution 42, which allows banks and VAMC to rapidly repossess collateral in the event of a borrower defaulting, allowed banks to be more active in managing bad debts. As a result, the total stock of VAMC bonds at rated banks decreased in 2017, the first decline since VAMC began operating. With this being said, banks are on track towards resolving bad debts, according to Moody’s, although asset risks remain elevated for some banks owing to their large exposure to problematic legacy assets. Generally, with improved profitability, banks are now capable of increasing credit provisions and building up buffers against problem assets.

Source: VietNamNet News February 06, 2018 01:52 UTC