Collectius, a debt restructuring partner for financial institutions across Southeast Asia, has acquired more than $800 million in non-performing loans (NPLs) from a Vietnam-based commercial bank.
This is the Singapore-based firm’s first portfolio in Vietnam since entering the market at the end of last year. It did not disclose the bank’s name.
The deal, which includes a combination of credit cards and personal loans, represents the largest single acquisition made by Collectius to date, and signifies a growing need for debt restructuring solutions in Vietnam, one of the world’s fastest-growing economies.
The NPLs were a joint acquisition by Collectius and World Bank investment arm IFC. Both parties partnered in 2020 to launch a $60 million Distressed Asset Recovery Platform Program that focuses on acquisitions and resolutions across emerging markets. IFC is also a minority equity shareholder in Collectius.
"Vietnam is one of the fastest growing economies in the world and the banking system, alongside the central bank, is accelerating the process of handling and restructuring bad debt. As a leading fintech pioneer in unsecured debt purchases, we are excited to work with partners in the country to contribute to a well-functioning NPL market that is key to a healthy banking sector," said Gustav Eriksson, Group CEO at Collectius.
Banks in Vietnam are expected to see rapid credit growth this year as the economy has re-opened following two years of pandemic restrictions. Collectius said the ratio of NPLs in the country is likely to increase as the regulatory forbearance to restructure loans is set to expire. The loan moratorium issued by the State Bank of Vietnam, which allows banks to extend their debt repayment terms to customers, came to an end on June 30, 2022.
Collectius operates in Singapore, Indonesia, the Philippines, Malaysia, Thailand, India, and Vietnam. The firm is majority-owned by its two founders Gustav Eriksson and Ivar Björklund, with the remainder owned by IFC, Stena AB, and Formica Capital.
Collectius and IFC are together examining the NPL acquisition sector with a view to designing best practices around debt monitoring and resolution, and how this may serve to beneficially affect regulations in Asia.