In 2022, the State Audit audited financial reports and operations related to the management and use of capital and state assets of the State Bank of Vietnam (SBV) in 2021 and five financial institutions, commercial banks and insurance companies.

Hot growth in risky business fields

In 2021, SBV conducted monetary policy management and bank operation solutions, contributing to controlling the inflation rate at 1.84 percent. This helped to stabilize the macro-economy, support economic growth, and stabilize the monetary and forex markets. The audited banks were found to ensure safety criteria in their operations, making profits with the on-balance sheet bad debt ratio below 3 percent.

However, the State Audit noted that with the credit growth rate of the whole economy at 13.61 percent, the credit growth rates in all risky business fields were higher than the general growth rate (15.37 percent for real estate, 23.85 percent for securities and 17.65 percent for corporate bonds).

The ratio of outstanding loans of the economy to GDP was high (114.3 percent in 2020 and 113.2 percent in 2021).

According to the World Bank (WB), Vietnam’s ratio is among the highest in the world, which shows risks in controlling credit flow into risky business fields.

The State Audit also pointed out that there is still no legal document stipulating the management and control of credit growth rate targets in general and credit growth rate targets for every credit institution.

Some commercial banks have been found having credit growth rates exceeding the maximum levels set by the central bank. For example, the credit limit was set at 13.48 percent for Ban Viet Bank, but the real rate was 15.67 percent.

Other banks were found exceeding the limits at certain moments of the year, such as Phuong Dong Bank (July 31, 2021; August 31, 2021; September 30, 2021 and October 31, 2021).

The State Audit has found ineffective financial investments.

At Military Bank, the balance of bond investments in Shipbuilding Financial Company by December 31, 2021 totaled VND50 billion and the provision was 100 percent; while the investment valued in AAA Insurance JSC reached VND33.96 billion since 2005 (3.52 percent of contributed capital). The company had been operating ineffectively since 2009 and incurred the accumulated loss of VND776 billion by the end of 2021.

Regarding the implementation of the plan on reshuffling credit institutions in association with the bad debt settlement in 2016-2020, the State Audit said that the banking system has been operating in a safe mode.

Duy Anh