Breaking bad debt: Vietnam tackles NPLs

New regulations should help the country clear up its non-performing loans, but the move has serious political and economic implications.

It’s roughly 10 years since work began on the Saigon One Tower, a 42-story skyscraper in downtown Ho Chi Minh City, and still it remains far from completed. The desolate site is a shell of steel bars and concrete walls hardly the “new landmark gracing the city with its beauty” that was promised.

The Saigon One Tower project stalled in 2011, when the housing market crashed in Vietnam’s biggest city. That is until recently when Vietnam Asset Management Company VAMC, a bad debt manager set up in 2013, seized ownership of the ill-fated project, the first repossession of collateral for non-performing assets under new legislation introduced in mid-August to...

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