VietNamNet Bridge – The National Financial Supervisory Commission has reported that the level of non-performing debt on the books of Vietnam’s banks has sunk to around 9 percent. In addition to this assessment, the commission also says that the Vietnamese economy bottomed out in the middle of last year and has been rising ever since.

The National Financial Supervisory Commission today published the overview report on the financial market in 2013 and forecasts for 2014.

According to the commission’s Deputy Chairman Truong Van Phuoc, total bank assets in 2013 increased by 15% and the quality of assets also improved. The Commission’s statistics showed that the non-performing loan ratio (NPL) of approximately 9% is completely founded.

According to the State Bank of Vietnam (SBV), the bad debt ratio of the whole banking system fell sharply from 4.73% at the end of last October to 3.63% at the end of 2013. If all sub-standard loans were added, the SBV estimated that the bad debt rate is only about 9%. Previously, Moody's had reported that Vietnam’s NPL must be at least 15% of the total debt balance.

The National Financial Supervisory Commission said that while credit growth in 2013 was higher than 2012, the interest rate was lower. Credit for the economy in 2013 increased by 12.5% compared to 9.8% in 2012. Lending rates on average, as calculated by the commission, decreased from 20% in 2011 to around 12% in 2013.

Compared with the previous year, according to Mr. Phuoc, the total asset structure of banks has changed. In the previous year, of every VND100 of assets, up to VND23 were deposits and interbank loans. “But in 2013, this rate fell to VND17. This demonstrates that the amount of deposits from the population increased,” said Phuoc.

The National Financial Supervisory Commission also said that the economy had escaped from the bottom since the third quarter of last year. Mr. Dang Ngoc Tu, a commission member, said the economy continuously grew from the second quarter of 2013, after consecutive contractions in the previous quarters.

“This trend will be maintained in 2014 and it may reach 5.8% for the whole year,” he said.

Regarding inflation, the Commission’s report says that it will be around 5% in 2014.

S. Tung