VN credit institutions recover nearly $1.2b of bad debts in Q1 2020

Credit institutions in Viet Nam settled more than VND26.94 trillion (US$1.17 billion) of non-performing loans (NPLs) in the first quarter of this year.

The central bank is expected to grant higher limits for loan growth to banks that have adopted Basel II and maintain good financials this year. — Photo cafef.vn

The latest report released this week by the State Bank of Viet Nam (SBV) showed credit institutions handled nearly VND1.077 quadrillion of NPLs from 2012 to the end of March this year.

With the recovery, the bad debt ratio of the whole banking system has remained under control at 1.77 per cent of the total outstanding loans by the end of the first quarter this year, meeting the Government’s target of keeping the rate below 3 per cent in 2020.

To continually boost the recovery of bad debts, SBV governor Le Minh Hung has asked credit institutions to review and provide detailed roadmaps and solutions for settling their bad debts each year until 2022.

Credit institutions have also been asked to look for buyers for the debts they sold to the Viet Nam Asset Management Company (VAMC), while the VAMC has been asked to speed up the handling of bad debts and collateral the company purchased following market-based mechanisms.

SBV has also issued regulations and policies in line with international practices to improve safety standards in banking, which has contributed to stronger governance and risk management capability under Basel II international banking standards.

 

In a recent report, Moody's Investors Service pointed out that downside risks to asset quality of Vietnamese banks can arise from disruptions caused by the COVID-19 pandemic, which, if prolonged, will lead to increases in non-performing loans in the manufacturing, trade and other sectors, given Viet Nam's large exposure and close ties to global supply chains.

According to the rating agency, as for profitability, the gap will widen between banks that have adopted the new Basel II capital standards and those that have not.

Moody's also expects that in 2020, the country's central bank will grant higher limits for loan growth to banks that have adopted Basel II and maintain good financials. The higher growth limits will translate into larger gains in earnings and widen the profitability gap between banks that have and have not adopted the new capital standard. — VNS

Will Circular 18, COVID-19 ‘crush’ consumer credit?

Will Circular 18, COVID-19 ‘crush’ consumer credit?

2020 may become a ‘nightmare’ for many consumer finance companies, which could see their profits drop sharply because of new regulations and the effects of COVID-19.

COVID-19 woes to weigh on credit growth even with lower interest rates

COVID-19 woes to weigh on credit growth even with lower interest rates

Vietnam’s credit growth is forecast to slow to only 8 percent in 2020 from 13.7 percent last year due to a sharp slowdown in economic activity amid the COVID-19 pandemic.

 
 

Other News

.
Plenty of room remains for growth of consumer credit market: Insiders
Plenty of room remains for growth of consumer credit market: Insiders
BUSINESSicon  01/04/2021 

Though Vietnam’s outstanding consumer credit almost tripled over the last decade, its share of total outstanding loans is yet to keep pace with that of its regional nations. 

Owner of US$7 billion system, billionaire Nguyen Dang Quang takes new step
Owner of US$7 billion system, billionaire Nguyen Dang Quang takes new step
BUSINESSicon  01/04/2021 

After Masan Group's acquisition of Vingroup’s retail chain, Masan’s Nguyen Dang Quang took great steps to master the $7 billion system and form an ecosystem for Vietnamese people.

Banks required to issue chip cards for security
Banks required to issue chip cards for security
BUSINESSicon  01/04/2021 

Vietnamese commercial banks are required to issue chip ATM cards to improve customers’ transaction security from March 31, according to the State Bank of Vietnam’s Circular No. 22/2020/TT-NHNN.

Industries bet on vaccine visa measures
Industries bet on vaccine visa measures
BUSINESSicon  01/04/2021 

In line with the global vaccine visa drive, Vietnam’s latest move to complete technical infrastructure for the availability of such a travel document in April is expected to revive industries, heralding strong economic recovery ahead.

Big businesses pour billions of dong into land purchases in Da Nang
Big businesses pour billions of dong into land purchases in Da Nang
FEATUREicon  01/04/2021 

While other land markets are hot, Da Nang remains very quiet, prompting many investors from Hanoi and HCM City to collect land plots in advantageous positions in "bottom fishing" deals.

More than 10 sugar mills shut down because of big losses
More than 10 sugar mills shut down because of big losses
FEATUREicon  01/04/2021 

Many sugar mills have had to shut down because they cannot compete with imports.

Vietnam Airlines unveils coveted US flight proposals
Vietnam Airlines unveils coveted US flight proposals
BUSINESSicon  31/03/2021 

Vietnam Airlines’ dream of a direct commercial flight to the US is being quickened as a way to shelter from the financial trouble amid the pandemic, with repatriation flights being the pre-runner for future non-stop journeys across the Pacific Ocean.

Rapid growth of online delivery services
Rapid growth of online delivery services
BUSINESSicon  01/04/2021 

The sudden, unexpected and virulent spread of the Covid-19 pandemic brought about a change in perception and planning in consumer sales behavior, and many well established businesses made a strong shift towards online delivery servicing. 

New strategy to place priority on green growth
New strategy to place priority on green growth
BUSINESSicon  31/03/2021 

The Ministry of Planning and Investment is drafting a national green growth strategy and plans to submit it to the Government by June to accelerate the transition towards a carbon-neutral economy in Vietnam.

Many Vietnamese exporters see profit soar during COVID-19
Many Vietnamese exporters see profit soar during COVID-19
BUSINESSicon  31/03/2021 

Many Vietnamese exporters have seen a sudden increase in profits during the COVID-19 pandemic.

Aviation industry: Sasco reports profit, Nasco reports loss
Aviation industry: Sasco reports profit, Nasco reports loss
BUSINESSicon  31/03/2021 

Aviation service companies continue experiencing hardships due to the Covid-19 pandemic, but the business of Johnathan Hanh Nguyen still is making a profit.

Wind, solar power projects complain about VAT refunds
Wind, solar power projects complain about VAT refunds
FEATUREicon  31/03/2021 

Wind power developers, who are running against time to put their projects into operation prior to November 2021, now face another problem: they may not get a VAT (value added tax) refund because of certain regulations.

Businesses still making under-the-table payments
Businesses still making under-the-table payments
BUSINESSicon  01/04/2021 

Under-the-table payments, often required in administrative procedure categories and enforcement stages, has been compared to a "leech" that persistently causes pain to businesses and the public.

Attracting multi-billion dollars worth of investments to IZs, tycoon earns big money
Attracting multi-billion dollars worth of investments to IZs, tycoon earns big money
BUSINESSicon  31/03/2021 

The real estate firm of Dang Thanh Tam has attracted $1.2 billion worth of investments into its IZs within a short time, projecting a profit increase of 6-7 times in 2021 amid continued foreign capital inflow.

Vietnam to develop wind, solar power, but safety concerns exist
Vietnam to develop wind, solar power, but safety concerns exist
FEATUREicon  31/03/2021 

Wind and solar power continues to be prioritized but solutions are needed to ensure the safety of the electricity system when operating volatile sources of energy.

Home loan interest rates fluctuate
Home loan interest rates fluctuate
BUSINESSicon  31/03/2021 

Many commercial banks have adjusted their preferential home loan interest rates, ranging from 5.99 percent to 9.5 percent per annum.

Beauty queens gather in Hanoi
Beauty queens gather in Hanoi
BUSINESSicon  30/03/2021 

The two runner-ups, Tu Anh and Huyen My, joined Miss Vietnam World Ngo Phuong Lan, actors Huynh Anh, Doan Quoc Dam and actress Diem Hang at a recent event in Hanoi.

VIETNAM BUSINESS NEWS MARCH 30
VIETNAM BUSINESS NEWS MARCH 30
BUSINESSicon  30/03/2021 

Vietnam-UK trade deal to officially take effect from May

Mekong Delta continues to develop transport infrastructure
Mekong Delta continues to develop transport infrastructure
BUSINESSicon  30/03/2021 

The Mekong Delta is working with the Ministry of Transport to improve the local transport infrastructure and thus trade flows, the Can Tho branch of the Vietnam Chamber of Commerce and Industry has said.

VIETNAM BUSINESS NEWS MARCH 31
VIETNAM BUSINESS NEWS MARCH 31
BUSINESSicon  31/03/2021 

Ministry sets up team to study virtual assets, money

 
 
 
Leave your comment on an article

OR QUICK LOGIN