Some banks recall bad debts

Eximbank is facing difficulties to recover a debt of VND 746 billion of 7 customers who had collaterals as shares of Sacombank from 2016 until now. Photo: ST

In the audited financial statements of Eximbank for 2019, KPMG Audit Firm gave opinions stressing debt classification and provision for loans of groups of customers with an amount of VND 746 billion. This money was guaranteed by assets that are shares of other bank.

Among the debts of VND 973 billion in group 3 (substandard – bad debt group) of Eximbank, there were VND 746 billion of principal debit balance of loans of seven customers who had collaterals as shares of Sacombank and provision of VND 43 billion which was restructured and remained in the debt group according to Official Letter No.942/NHNN-TTGSNH issued on December 1, 2016 until the State Bank of Vietnam (SBV) approved the restructuring plan after the consolidation of Sacombank and settling of relevant debts. On May 22, 2017, the SBV approved the restructuring plan after the consolidation. However, until the date of making this financial report, Eximbank had not received any other guidance from the SBV on the classification and provision of these loans.

In 2016, Eximbank sued all seven customers to recover debts. By the date of making this consolidated financial statement, the lawsuits involving five out of seven customers with a principal debit balance of VND 500 billion had a verdict with a judgment that they must pay the bank a total of VND 711.7 billion (including principal and interest). If these customers do not pay or fully pay, Eximbank has the right to request law enforcement authorities to conduct liquidation of assets to ensure debt recovery.

For the remaining two customers with principal debit balance of VND 246 billion, Eximbank is waiting for the court to complete proceedings to conduct a first instance trial of the case.

Also regarding Sacombank’s shares, A&C Auditing and Consulting Company noted Kienlongbank on debt classification and handling loans and accrued interest related to a group of customers with collateral as shares of another bank.

Among the current debit balance as at December 31, 2019, there was VND 1,895 billion of debit balance for a group of customers with collateral as Sacombank's shares. These loans have extended the deadline of paying the principal and interest at least once. Currently, Kienlongbank is classifying these loans as debt group 1 - current debt under the Decision 2595 of SBV and other documents of the SBV.

Besides, among current debit balance as of December 31, 2019, it included VND 132 billion of debit balance on loans for agricultural and rural development and to maintain the same debt group as before restructuring in accordance with Decree No. 55/2015/ND-CP of the Government dated June 9, 2015 on credit policies for agriculture and rural development and Circular 10/2015/TT-NHNN guiding implementation of some contents of Decree 55.

The loan of Nam A Bank for three people's credit funds is under special control towards the policy of SBV with the amount of VND 208.6 billion as of December 31, 2019 (it was VND 49.4 billion at December 31, 2018) is a current debt while awaiting specific instructions from the State Bank also mentioned by KPMG Audit Company.