Bad debt settlement in Vietnam process slowing down

Banks’ nine-month financial reports show that bad debts have increased compared with the beginning of the year, though the bad debt ratio has fallen.

A report released at the conference on reviewing the two-year implementation of the National Assembly’s Resolution 42 on settling bad debts showed that from August 15, 2017, when Resolution 42 took effect, to August 31, 2019, credit institutions settled VND236.8 trillion worth of bad debts, which means that VND9.6 trillion was settled a month, higher than the VND4.7 trillion a month in 2012-2017.

Bad debt settlement in Vietnam process slowing down



The report released at the conference on reviewing the one-year implementation of the resolution, which took place one year before, showed that the amount of bad debts settled in the period from August 15, 2017 to June 30, 2018 was VND138.3 trillion, or VND13.8 trillion a month.

As such, the bad debt settlement process seems to have slowed down.

The value of bad debts has increased compared with the beginning of the year, though the bad debt ratio has decreased.

Banks’ nine-month financial reports show that bad debts have increased compared with the beginning of the year, though the bad debt ratio has fallen.

The bad debt in the balance sheet of Viet A Bank had reached VND481 billion by September 30, an increase of VND38 billion compared with the end of 2018. VIB has the bad debt ratio decreasing from 2.52 percent to 2.04 percent, but its value of bad debts increased by 4 percent to VND2.517 trillion.

 


Bac A reported bad debt of VND504 billion by September 30, an increase of VND15 billion compared with the beginning of the year.

As for ABBank, the bad debt unexpectedly soared by 79 percent to VND1.766 trillion, which means the ratio of NPL to outstanding loans has surged from 1.89 percent to 3.39 percent. This includes VND1 trillion worth of fifth-group debt, a sharp rise of 56 percent compared with the same period last year.

This, plus the minus growth rate of 0.05 percent of outstanding loans, has pushed the bad debt ratio up, exceeding the safety line of 3 percent.

NCB has not provided detailed information about the bad debt, but said in the first nine months of the year, it had to make a provision of VND33 billion against risks.

Saigon Bank had balance-sheet bad debt decreasing by VND7 billion to VND294 billion, but its fifth group debt (the worst debt) reached VND211 billion, accounting for a high proportion of 72 percent of total bad debts.

MBBank is another bank which saw an increase in the fifth group bad debts. Its bad debt ratio is at 1.35 percent, higher than 1.22 percent in late 2018, while the bad debt value increased by 23 percent to VND577 billion. Of this, the fifth group bad debt increased by VND386 billion to VND1.345 trillion. 

Linh Ha

Loans to BOT infrastructure projects pose risks of bad debts: State Bank of VN's Governor

Loans to BOT infrastructure projects pose risks of bad debts: State Bank of VN's Governor

The central bank warned commercial banks of this issue two years ago.

Postive changes made to resolve Vietnamese banks' bad debt

Postive changes made to resolve Vietnamese banks' bad debt

The banking sector had made considerable headway into settling bad debt, restructuring credit institutions and developing the banking system two years since the National Assembly issued a resolution on the industry.  

 
 

Other News

.
Is Vietnam ready to receive new FDI wave after Covid-19?
Is Vietnam ready to receive new FDI wave after Covid-19?
BUSINESSicon  27/05/2020 

Prof Nguyen Mai, an expert on FDI, and chair of the Vietnam Association of Foreign Invested Enterprises (VAFIE), pointed out three problems in the picture of FDI in Vietnam.

Vietnam ready for swift actions to boost economy
Vietnam ready for swift actions to boost economy
BUSINESSicon  26/05/2020 

The ongoing health crisis has been taking a heavy toll on the Vietnamese economy.

Numerous SOEs under special financial supervision
Numerous SOEs under special financial supervision
BUSINESSicon  26/05/2020 

Subsidiaries of SOEs like Jetstar Pacific, Angkor Air, DAP-Vinachem, and Petrolimex Laos will come under special financial supervision.

Environment Minister: Land Law disallows foreign ownership of land
Environment Minister: Land Law disallows foreign ownership of land
BUSINESSicon  26/05/2020 

The Land Law disallows the issuance of land use rights certificates to aliens, Minister of Natural Resources and Environment Tran Hong Ha told reporters on the sidelines of the National Assembly session on May 25.

Ministry proposes slashing corporate income tax by 30% for small, micro businesses
Ministry proposes slashing corporate income tax by 30% for small, micro businesses
BUSINESSicon  26/05/2020 

The Ministry of Finance has proposed that the Government reduce corporate income tax by 30% for small and micro enterprises in 2020 to help them overcome difficulties caused by the Covid-19 pandemic.

Funding shortage may leave 25 traffic projects suspended
Funding shortage may leave 25 traffic projects suspended
BUSINESSicon  26/05/2020 

As many as 25 traffic projects in Vietnam could be suspended or delayed due to capital shortages, according to the Ministry of Transport.

Local airlines would offer more rates with increasing ceiling prices
Local airlines would offer more rates with increasing ceiling prices
BUSINESSicon  26/05/2020 

Increasing ceiling rates for airfares would bring more chances for the local aviation firms to have flexible and suitable price policies on the...

China tests digital currency and policy recommendations for Viet Nam
China tests digital currency and policy recommendations for Viet Nam
BUSINESSicon  26/05/2020 

China this month started testing its sovereign digital currency, the so-called Digital Currency Electronic Payment (DCEP), putting pressure on Vietnam to research cryptocurrency in the context of international integration.

VN Trade Ministry sets up working groups for EVFTA
VN Trade Ministry sets up working groups for EVFTA
BUSINESSicon  26/05/2020 

The Import and Export Department under the Ministry of Industry and Trade has set up different working groups to implement the the EU-Viet Nam Free Trade Agreement (EVFTA).

Coronavirus: Lufthansa agrees €9bn rescue deal with Germany
Coronavirus: Lufthansa agrees €9bn rescue deal with Germany
BUSINESSicon  26/05/2020 

European markets rose on the bailout deal news, which sees Germany take a 20% stake in the firm.

WB: EVFTA could lift Vietnam’s exports by 12 percent by 2030
WB: EVFTA could lift Vietnam’s exports by 12 percent by 2030
BUSINESSicon  26/05/2020 

The World Bank (WB) has predicted that the EU-Vietnam Free Trade Agreement (EVFTA) could help Vietnam’s GDP and exports grow 2.4 percent and 12 percent, respectively, by 2030, the Ministry of Industry and Trade (MoIT) has reported.

Japanese firm and officials under investigation over alleged bribery
Japanese firm and officials under investigation over alleged bribery
BUSINESSicon  26/05/2020 

Minister of Finance Dinh Tien Dung has requested an urgent investigation into an alleged bribery of Vietnamese officials by Tenma Vietnam - a subsidiary of Japan’s plastic product maker Tenma Corporation.

Pharmaceutical enterprises enjoy good earnings in Q1
Pharmaceutical enterprises enjoy good earnings in Q1
BUSINESSicon  26/05/2020 

Increasing demand for medicine amid the COVID-19 pandemic has helped most pharmaceutical enterprises report positive business results in the first quarter of this year.

Vietnam hopes to redraw map of supply chains as more companies leave China
Vietnam hopes to redraw map of supply chains as more companies leave China
BUSINESSicon  26/05/2020 

Experts believe that the departure of large manufacturing corporations from China, plus the plan to boost global economic development, will bring new opportunities to Vietnam.

During COVID-19, VN real estate markets gather online
During COVID-19, VN real estate markets gather online
BUSINESSicon  26/05/2020 

Realtors have been trying to sell products online and through mobile apps.

VN car market continues to slide
VN car market continues to slide
BUSINESSicon  26/05/2020 

As predicted by experts, the Vietnamese automobile market continues sliding as manufacturers cannot sell products and their production has arrived at a ‘new normal’.

Vietnamese businesses ready to exploit EU market under EVFTA
Vietnamese businesses ready to exploit EU market under EVFTA
BUSINESSicon  26/05/2020 

Vietnamese enterprises’ awareness of EVFTA has been heightened significantly, and they have prepared to grab business opportunities and find a foothold in the supply chain.

VN ready to be world’s factory, but is the world?
VN ready to be world’s factory, but is the world?
BUSINESSicon  26/05/2020 

Vietnam attracted US$12.33 billion worth of foreign direct investment in the first four months of 2020, a year-on-year decrease of 15.5 per cent due to the impact of the COVID-19 pandemic, according to the Foreign Investment Agency.

A common voice in labor relationship needed
A common voice in labor relationship needed
BUSINESSicon  26/05/2020 

Covid-19 has forced many enterprises to lay off their employees. However, the biggest headache in the labor relationship is how to seek a common voice between employers and employees.

Transport Ministry proposes State to compensate controversial BOT tollgates
Transport Ministry proposes State to compensate controversial BOT tollgates
BUSINESSicon  25/05/2020 

The Ministry of Transport has proposed that the Government compensate developers of two out of four build-operate-transfer (BOT) tollgates and shut them down due to protests among road users.

 
 
 
Leave your comment on an article

OR QUICK LOGIN