The company will also buy up an additional VND4.5 trillion ($192.61 million) worth of bad debt with cash this year, and issue VND20 trillion ($856 million) worth of special bonds, according to its 2019 business plan published this week.

VAMC has asked the government to inject an additional VND3 trillion ($128.4 million) in the company so that it has enough capital to buy up the planned amount of debt in the banking sector at market prices.

The company, run by the central bank, had been buying up bad debt since 2013 to rescue banks from either bankruptcy or net losses in return for five-year bonds. Once these bonds mature, the banks will have to buy back any bad debt VAMC has failed to recover.

The company said it will continue working with related ministries, localities and credit institutions to improve the banking sector’s legal framework and coordinate with relevant agencies in buying bad debts.

In 2018, VAMC had bought 761 bad debts from 13 credit institutions with special bonds for VND29.81 trillion ($1.28 billion). The original value of these debts was VND30.91 trillion ($1.32 billion). It also bought another VND2.8 trillion of bad debts with cash.  

At the end of 2018, the company possessed VND339 trillion ($14.5 billion) worth of outstanding bad debt that it had bought for a total of VND307 trillion ($13.14 billion).

It has recovered a total of VND119 trillion ($5.09 billion) since 2013.