Vietnam’s financial sector stands at a strategic crossroads. Decision 1058, issued in 2017, outlines a long-term roadmap to restructure credit institutions and control systemic risk, especially from non-performing loans (NPLs). It reflects a broader governmental recognition that economic growth must be accompanied by financial stability. The Vietnam Asset Management Company (VAMC) was placed at the heart of this strategy.
Initially, VAMC focused on absorbing NPLs through special bond transactions, which postponed actual loss recognition. While this eased pressure on bank balance sheets, it failed to remove risk from the system or resolve underlying business failures. Without a secondary market for distressed debt or enforcement mechanisms for asset resolution, VAMC became a passive repository rather than an engine of transformation.
In recent years, the government and regulators have moved to evolve VAMC’s mandate. There is now greater emphasis on direct acquisition of bad debts, broader authority in asset disposal, and plans to involve foreign investors. These developments indicate a gradual convergence toward international standards of debt recovery. But implementation remains constrained by capacity gaps, legal friction, and a lack of skilled turnaround professionals.