Though the asset quality of banks in Vietnam will be temporarily under control until the end of 2023, experts said more attention should be paid to the issue in 2024 as bad debts are rising.

Credit ratings agency Fitch Ratings has recently revealed upgrades for several banks, in the wake of its decision to raise Vietnam's national credit rating to BB+ with a long-term outlook of "Stable".

The Vietnamese government is intensifying oversight in the banking sector, targeting cross-ownership in credit operations and the complex issue of banks’ affiliated businesses.

The Government will conduct an inspection of credit growth management by the central bank in response to low credit growth.

The State Audit of Vietnam (SAV) has recommended the State Bank of Vietnam (SBV) coordinate with agencies to urgently speed up the compulsory transfer of poor-performing banks OceanBank, GPBank, CBBank and DongA Bank.

After many years of decline, DongA Bank in 2022 had outstanding loans equal to 102 percent of the year’s plan, mobilized capital equal to 98 percent of the plan, and saw  deposits rise by 11 percent over the beginning of the year.

The selling prices of many assets that banks have foreclosed on because borrowers cannot pay debts have been lowered, but many assets remain unsold.

Transactions with a value of VNĐ400 million or more must be reported to the State Bank of Vietnam (SBV) from December 1, 2023, according to a new policy.

With bond interest rates 1-2 percent higher per annum than 12-month savings interest rates, commercial banks are increasing corporate bond issuance to mobilize more long-term capital.

The major source of income for many realtors, Industrial Zone (IZ) developers, insurers and fertilizer manufacturers is interest from bank deposits, rather than from their core business fields.

The net interest margin (NIM) narrowed, while non-performing loans were increasing.

Demand for home loans remains low, although interest rates have decreased by 1-3 percentage points per year compared to the beginning of this year.

Many domestic banks have reported positive growth in profit in the third quarter and the first nine months of 2023 even amid the slow credit expansion and a downturn trend in profit of the whole banking sector.

The bad debt ratio of the banking system skyrocketed from 2 per cent at the beginning of this year to 3.56 per cent, or more than VNĐ440 trillion, at the end of July 2023, according to the latest data from the State Bank of Vietnam (SBV).

Thanks to the deal, VPBank’s owner equity will be boosted from VND103.5 trillion to approximately VND140 trillion.

In the third quarter of 2023, a notable variance is anticipated in the profits of commercial banks, with some continuing to experience double-digit growth, while others see a sharp downturn.

Tough business conditions, mostly in the real estate sector, led bad debt in the banking system soaring from 2% early this year to 3.56% in late July, according to the State Bank of Vietnam (SBV).

The State Bank of Vietnam (SBV) is directing concerned parties to submit to the government a plan on compulsory transfer of two weak banks for approval.

The State Bank of Vietnam (SBV), while affirming that it is working hard to settle cross ownership among banks, has complained that this is a complex process because of the lack of a reasonable mechanism, information, and tools for control.

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