Debts

Most markets rose Monday ahead of US debt talks between President Joe Biden and congressional leaders, with both sides still apart but also confident a deal can be reached to avert a catastrophic default. Sentiment was also being supported by hopes the Federal Reserve will stand pat on interest rates at its next gathering, and Biden saying China-US relations should see a thaw "very shortly". After returning from the G7 summit in Japan, Biden will meet Republican House Speaker Kevin McCarthy at the White House, with a warning that the government could run out of cash as soon as June 1. But while there is a broad expectation that an agreement will be found, Biden insisted he would not give in to demands for spending cuts, saying they were "frankly unacceptable". "It's time for the other side to move from their extreme positions," he said. For his part, McCarthy said his position remained unchanged, tweeting: "Washington cannot continue to spend money we do not have at the … [Read more...] about Markets advance ahead of US debt talks

Nguyen Duc Thai Han, deputy director general at ACB, noted that revising growth targets attached to controlling bad debts has been causing banks many difficulties. So far this year, ACB has set aside $43.4 million worth of credit packages, with reduced interest rates, to benefit both retail and corporate customers. New customers are being offered a 0.3 percentage point reduction, while regular customers are offered 0.2. < “With a newly released circular on debt rescheduling, part of the risk facing businesses has been passed to banks,” said Han. In light of ACB’s first quarter financial statement, the bank’s bad debt surplus rose 31.5 per cent to touch $17.4 million, bringing its bad debt ratio from 0.74 per cent in late 2022 to 0.97 per cent in the latter part of the first quarter (Q1). ACB's case is not rare. Tech-driven lender TPBank saw its bad debt ratio swell 84 per cent from $59 million to $86.9 million in late Q1, The volume of subprime debts soared to $52.1 … [Read more...] about Vigilance over bad debt essential

Optimism that the United States will avert a calamitous default supported equities Tuesday, with President Joe Biden and House Speaker Kevin McCarthy saying they held productive talks on the debt ceiling. With just weeks to go before the country runs out of cash, the standoff has become the key topic on trading floors on fears that a US failure to pay its bills will send shockwaves through markets and the global economy. Months of negotiations have failed to break the deadlock and lift the borrowing limit from the current $31.8 trillion, but things appear to be moving in the right direction after a series of Biden-McCarthy meetings. After their latest get-together on Monday, the Republican Speaker said: "I felt we had a productive discussion. We don't have an agreement yet, but I did feel the discussion was productive in areas (where) we have differences of opinion." He added that negotiators would "work through the night" to move the sides closer and that he and Biden would … [Read more...] about Markets mostly rise after ‘productive’ Biden-McCarthy debt talks

Workers handle steel rods at a construction site in Thai Nguyen Province. — VNA/VNS Photo Hoang Nguyen Little is known about the exact amount of bad debts being incurred by construction firms, but the non-payment is eating into their bottom line day by day. Le Hong Minh, Chairman of the 2T Corporation, claimed that he had never witnessed such a serious situation in the construction sector for 40 years. Debt collection has now become a high priority for small- and medium-sized firms. And his firm is no exception. The debts owed by construction investors to 2T have amounted to over VND200 billion (US$8.5 million), two times higher than its charter capital of VND100 billion. The firm has no option but to withhold the transfer of some finished units to the investors to press for payment. Dozens of condotel apartments have been put at its disposal as a result of their defaults. "I've suddenly become the owner of dozens of villas and condotel apartments. But those properties are … [Read more...] about Bad debts running rampant in construction sector

Asian markets tracked losses in Wall Street on Wednesday as investors grow increasingly concerned about stalled US debt ceiling talks to avert a painful default. The optimism that flowed through trading floors at the start of the week has given way to trepidation, with several Republicans questioning an early June deadline, and some even saying the country is nowhere near running out of cash anyway. All eyes are now on Washington, where President Joe Biden and House Speaker Kevin McCarthy have had a number of meetings to find a path to lifting the borrowing limit from the current $31.8 trillion. The two men said Monday that talks had been "productive" and were confident a deal would be coming. Republicans have set cutting spending next year to 2022 levels as a "red line", but Democrats have so far refused to commit to that. On Tuesday, Republican Representative Ralph Norman warned that McCarthy had said the two sides were "not anywhere near close" to an agreement. The … [Read more...] about Asian markets sink as US debt talks stall

Hopes that lawmakers are edging closer to a deal to hike the US debt ceiling lifted spirits in Asia on Friday, though traders remain nervous as a deadline to avert a calamitous default draws closer. Markets have taken a hit in recent days on worries about the slow pace of negotiations in Washington, even after President Joe Biden and House Speaker Kevin McCarthy expressed optimism earlier in the week. On Thursday, Biden reiterated his pledge that "there will be no default" despite the wrangling, adding that talks with McCarthy, who leads the Republican negotiators, had been "productive". For his part, the Speaker also expressed his determination to get an agreement to raise the borrowing limit by June 1, when the Treasury has warned the government is expected to run out of cash to service its debts. "We know where our differences lie," he said. "We do not have an agreement yet. We knew this would not be easy. It's hard, but we're working. And we're gonna continue to work till … [Read more...] about Asian markets mostly rise on US debt ceiling optimism

The country’s biggest lender Vietcombank saw its bad debt ratio rise from 0.68% at the end of last year to 0.84% by the end of March. Two other major state-owned lenders have found themselves in the same boat. BIDV saw its second-group debt (overdue by up to 90 days) rise 47% in the first three months of 2023, while third-group debt (overdue by up to 180 days) doubled during the period. The bank’s fourth-group debt (overdue by up to 360 days) rose 60%. VietinBank also saw an increase in the above debt groups. To deal with the problem, Vietcombank has increased its write-offs 30% since the beginning of the year. For every dong of bad debt, the bank has written off VND3 to ensure financial safety. VietinBank has spent over VND7 trillion reducing fifth-group debt (overdue for more than 360 days) by over 30%. At the same time, bad debt problems at private banks seem to be getting even worse than at state-owned lenders. VPBank saw its second- and third-group debt double … [Read more...] about Bad debt on the rise at banks

"It's very close and I'm optimistic," Biden told reporters at the White House. "I'm hopeful we'll know by tonight whether we're going to be able to have a deal." The Democratic president said he hoped for a resolution to the standoff "before the clock strikes twelve." It was by far the strongest indication that the drama in Washington might end, allowing the government to borrow and avoid a default likely to trigger a recession, mass job losses and recession. Earlier, Treasury Secretary Janet Yellen said the dreaded X-date, when the government runs out of money unless it can borrow, will now be June 5, not June 1. Yellen, however, warned that the deadline extension does not change the urgency. "Waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States," she said in a letter to the Republican leader of … [Read more...] about Biden says ‘hopeful’ on US debt deal within hours

"This is a deal that's good news for ... the American people," Biden told reporters at the White House after a call with McCarthy to put the final touches to a tentative deal they struck on Saturday night. "It takes the threat of catastrophic default off the table, protects our hard-earned and historic economic recovery," Biden said. The deal, if approved, will prevent the U.S. government from defaulting on its debt and comes after weeks of heated negotiations between Biden and House Republicans. It still needs to pass through a narrowly divided Congress before June 5, when the U.S. Treasury says it would run short of money to cover all of its obligations. "I strongly urge both chambers to pass that agreement," Biden said, adding that he expected McCarthy to have the necessary votes for the deal to pass. The deal has drawn fire from hardline Republicans and progressive Democrats, but Biden and McCarthy are banking on getting enough votes from both sides. McCarthy earlier … [Read more...] about Biden says final US debt ceiling deal ready to move to Congress for vote

The greenback notched a fresh six-month high of 140.91 yen in early Asia trade and was headed for a monthly gain of more than 3% against the Japanese currency. The yen's renewed decline has come on the back of rising U.S. Treasury yields, as bets grow that interest rates in the United States would stay higher for longer. Data released on Friday showed that U.S. consumer spending increased more than expected in April and inflation picked up, adding to signs of a still-resilient economy. Yields on U.S. Treasuries jumped on the back of the data, with the two-year yield , which typically reflects near-term interest rate expectations, rising more than 10 basis points to an over two-month high of 4.639% on Friday. Cash U.S. Treasuries were untraded in Asia on Monday, owing to the Memorial Day holiday in the United States, while futures were broadly steady. Ten-year futures' implied yield was 3.84%. The UK market is similarly closed on Monday for a holiday. Against the dollar, … [Read more...] about Dollar elevated as sticky inflation cements Fed hike bets, debt ceiling deal lifts optimism