The Governor of the State Bank of Vietnam (SBV) has issued Circular No. 16, amending and supplementing several provisions of Circular No. 04/2021. Circular 04 previously set out refinancing mechanisms for credit institutions that lent to Vietnam Airlines, as well as guidelines on restructuring repayment terms, maintaining debt classifications, and setting aside risk provisions for loans affected by the Covid-19 pandemic.

Circular 16 introduces key amendments, including updated provisions on debt restructuring terms, debt classification, and risk provisioning, while also outlining the responsibilities of certain SBV departments following internal reorganization.

Under Article 12 of the new circular, credit institutions are allowed to restructure Vietnam Airlines' debt repayment timeline for a maximum period ending no later than December 31, 2027. This extension is subject to the airline’s formal request and a positive assessment of its repayment capacity.

Compared to the original terms set out in Circular 04, this marks a 3-year extension of the debt restructuring period.

During the restructuring period, credit institutions must continue classifying and provisioning the debt in accordance with decisions issued by the Prime Minister.

Circular 16 also revises responsibilities for the SBV’s Banking Supervision and Inspection Agency. Specifically, within three working days of detecting that a credit institution has failed to collect payments as scheduled, the agency must issue a formal notice of violation. This notice must be sent to the credit institution, the SBV’s Transaction Office, the Monetary Policy Department, the Credit Department for Economic Sectors, and the Department of Supervision and Regulation of Credit Institutions. It must also initiate an inspection and handle the case under its authority.

Circular No. 16 officially came into effect on July 11.

At a recent mid-year business review, Vietnam Airlines leadership reported estimated Q2 revenue from air transport at approximately 22.1 trillion VND (around $867 million), exceeding projections by 5.9%.

The parent company’s estimated pre-tax profit for Q2 reached 1 trillion VND (about $39 million), while consolidated pre-tax profit hit 1.6 trillion VND (approximately $63 million).

In total, for the first half of 2025, the parent company expects pre-tax profit to exceed 4 trillion VND (around $157 million), and consolidated profit to surpass 5 trillion VND (about $197 million).

Tuan Nguyen