According to the State Bank of Vietnam (SBV), by the end of December 2018, the entire banking system had settled VND149.22 trillion worth of bad debts. 

The bad debt ratio of the credit institution system is 1.89 percent, lower than the 2.46 percent at the end of 2016 and 1.99 percent of 2017.

As of the end of 2018, bad debts, debts likely to turn into bad debts, and debts sold to Vietnam Asset Management Company (VAMC) in total had stayed at 6.5 percent.

As such, the bad debt ratio has dropped to its lowest point since 2012, below 2 percent, the threshold set in Resolution No 1.

Meanwhile, Q4 2018 finance reports which commercial banks have just released showed significant bad debt decrease compared with the beginning of the year. 

Fifteen banks, namely VPBank, Vietcombank, Sacombank, MBBank, Techcombank, VIB, LienVietPostBank, ACB, ABBank, TPBank, PGBank, BacABank, VietBank, Saigonbank, Kienlongbank, still had VND34.81 trillion worth of bad debts by the end of 2018, a sharp fall of 17.7 percent compared with Q3 end. 

Thanks to achievements gained in Q4, banks’ bad debts by the end of 2018 had become lower than at the end of 2017 (down by 4 percent).

Sacombank was the biggest surprise of the banking system, with bad debt dropping by 66 percent just in Q4. 

As of the end of 2018, its bad debt had decreased to 2.2 percent from 2.98 percent, or a sharp fall of 28 percent compared with the beginning of the year. Prior to that, Sacombank’s bad debt once reached a record high of 6 percent.

Asked about the considerable decrease of bad debt, a manager of the bank only said the bank was “following strictly the approved bad debt settlement plan”.

PG Bank, a small bank,  announced that its bad debt ratio had decreased to below 3 percent as of the end of 2018. The ratio had once climbed to 4.5 percent.

As for large banks, VPBank, Vietcombank, Techcombank, MBBank, ACB and Sacombank all have cut bad debts. VP Bank, for example, has seen bad debt decreasing from 4.7 percent in late September to 3.5 percent.

Vietcombank’s bad debts, by the end of 2018, had increased slightly by VND7 billion compared with the beginning of the year thanks to the sharp decrease of VND1.209 trillion in the last three months. 

The state-owned bank now has a bad debt ratio of 0.98 percent, the lowest in the banking system.

US$1=VND23,000

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