Vietnam confirms plans to set-up asset management company

AMC will buy bad loans from banks.

Vietnam’s first AMC will be established before the end of this month and will be managed by the central bank, the State Bank of Vietnam. The AMC will issue bonds to finance the acquisition of debt from banks.

It will help clean up banks’ balance sheets and that will definitely spur banks’ lending to fuel the economy, said Le Xuan Nghia, a member of the National Financial and Monetary Policy Advisory Council.

“The Politburo has already approved it, and preparation work is almost finished.”

The massive bad debt load of Vietnamese banks has been blamed for slashing domestic consumption and dragging economic growth to a 13-year low in 2012.

Prime Minister Nguyen Tan Dung last week announced the establishment of a steering committee to restructure banks by 2015. In February, Dung approved a master plan to revamp the economy.