Bad debt ratio falls to 6% Ngoc Lan By Ngoc Lan - The Saigon Times Daily HANOI – The bad debt ratio of the banking system has dropped to 6%, versus 8.6% a few months ago, heard a regular press briefing of the Government on Thursday. Vu Duc Dam, minister-chairman of the Government Office, said the Government was concerned about the slow credit growth in the first two months. However, given the aims for both economic growth and inflation restraint this year, credit will be used as an important monetary tool. “The credit growth target for this year is some 12%,” he said. The Government wants the goal to be allocated evenly throughout the months rather than in certain months to avoid causing inflationary pressure. The Ministry of Finance and the Ministry of Planning and Investment were asked to follow the above goals. In addition, interest rates should be slashed further so that enterprises can access loans. At the press briefing, Dam was asked many questions … [Read more...] about Bad debt ratio falls to 6%
Debt ratios
Bad debt ratio will spike on new bad debt classification method
VietNamNet Bridge - The changes in the criteria and the method for bad debt classification will surely make the bad debt ratio increase sharply. A report by the State Bank of Vietnam showed that by September 30, 2012, the bad debt ratio had accounted for 8.82 percent of the total outstanding loans of the whole banking system, estimated at VND2,800 trillion. Actual bad debts bigger than declared? Economists believe that the actual bad debt ratio is much higher than the reported figure, while the remaining part of the bad debt iceberg still has been hidden. In principle, the bad debts would be set aside the balance sheet when banks make provisions against risks. This means that the bad debts would not be shown on the books, but they still would exist in reality. In 2012, the State Bank of Vietnam allowed credit institutions slash the interest rates for loans, extend the debt payment and restructure the debts. As such, a part of the bad debts has been settled. When restructuring … [Read more...] about Bad debt ratio will spike on new bad debt classification method
High bad debt ratio in foreign currency loans warned
VietNamNet Bridge - The report by the State Bank of Vietnam shows the high growth rate of foreign currency loans in the first months of the year, which was much higher than the Vietnam dong lending growth rate. The "credit de-phasing" Among the credit institutions, the foreign currency outstanding loans growth rate of joint stock banks is just the second highest after the outstanding loans of non-bank credit institutions (+ 4.64 percent). However, since the foreign currency outstanding loans of the banks account for nearly 52 percent of the total banking system, the ups and downs of the bank always catch the special attention from the public. … [Read more...] about High bad debt ratio in foreign currency loans warned
Bank bad debt ratio could be 10 percent
VietNamNet Bridge – Experts believe that the bad debt ratio of the whole banking system by the second quarter of 2012 would be much higher than 8.6 percent, the figure released by the State Bank of Vietnam by March 31, 2012. The national economy remains pale, because of which businesses still cannot sell products to get money to pay bank debts. The reports released by six commercial banks all shown that their bad debts have increased sharply over the beginning of the year. Vietcombank, one of the biggest commercial banks in Vietnam, and Navibank saw the bad debts rising by nearly four percent. … [Read more...] about Bank bad debt ratio could be 10 percent
Vietnamese banks’ bad debt ratio remains an unknown
Governor of the State Bank of Vietnam Nguyen Van Binh said the bad debt ratio has increased from 3.2 percent earlier this year to 3.6 percent by mid April. However, other calculations show that the bad debt ratio is 3-4 times higher than the released figure. The 2012 annual report about Vietnam’s economy conducted by the Vietnam Center for Economics and Policy Research VEPR under the Economics University, an arm of the Hanoi National University, shows that the bad debt ratio of the Vietnamese banking system is estimated at between 8.25 and 14.01 percent. The report has also shown the forests by other institutions about the unknown. According to StoxPlus, the average bad debt ratio of the analyzed banks is 2.3 percent. Meanwhile, Fitch Ratings believes that the Vietnamese banks’ debt ratio is at 13 percent. Quoting Ho Ba Tinh, an analysis, the research team said the bad debt ratio of banks may reach 7-8 percent, or even over 10 percent, or about 300 trillion … [Read more...] about Vietnamese banks’ bad debt ratio remains an unknown