Bad debts kept rising in five months

Bad debts in the banking system in the first five months of 2024 continued to increase by some 75.9 trillion VND (3 billion USD) against the end of 2023.

The bad debt ratio of the banking system as of the end of May 2024 was at 4.94%, higher than the 4.55% at the end of 2023. (Photo: cafef.vn)

The bad debt ratio of the banking system as of the end of May 2024 was at 4.94%, higher than the 4.55% at the end of 2023. (Photo: cafef.vn)

Viet Dragon Securities Company (VDSC) cited the latest data from the State Bank of Vietnam (SBV) showing that the bad debt ratio of the banking system as of the end of May 2024 was at 4.94%, higher than the 4.55% at the end of 2023.

The data also shows debts, which had the repayment period to be restructured, and the debt group changed according to Circular No 06/2024 and Circular No 02/2023 of the SBV, increased quite sharply by 25.5% compared to the end of 2023 to 230.4 trillion VND.

At the same time, the number of borrowers, who had the repayment period restructured and the debt group unchanged, also surged sharply from 188,000 to 282,000 as of the end of June 2024.

The SBV early this month decided to allow commercial banks to reschedule the debt repayment period and maintain the debt group for certain sectors for an additional six months to the end of 2024, instead of June 30 this year.

The extension is expected to reduce pressure on companies which are struggling to service their debts and support economic recovery under the current challenging economic situation. The extension was made following reports show while existing bad debts have not been resolved, new bad debts were expected to surge with the payment deadline on certain sectors expiring at the end of this month.

The extension is welcomed by most businesses, as well as the banking sector, both of whom were concerned over their ability to meet the payment deadline of June 30.

According to the SBV, credit by the end of June 2024 increased by about 6% compared to the beginning of the year, reaching nearly 14.4 quadrillion VND. The central bank still has to control risks, ensure the safety of the banking system and focus on economic growth drivers, including those meeting new trends such as green credit.

Experts attributed the high credit growth in the first half of 2024 to recovery in loan demand, promotion in public investment, tax and fee reduction policies and implementation of preferential interest rate lending packages.

They forecast loan demand in the second half of this year will continue to accelerate thanks to macroeconomic recovery. The manufacturing sector has shown signs of recovery, the industrial production index in the past six months was estimated to increase by 7.54% over the same period in 2023./.

Source: VNA
en.vietnamplus.vn

Related News

Latest News

SBV makes significant net withdrawal to stabilise exchange rate

SBV makes significant net withdrawal to stabilise exchange rate

Analysis shows it’s an intervention to manage system liquidity.
Việt Nam could maintain inflation between 3.5–4.5% in 2025: experts

Việt Nam could maintain inflation between 3.5–4.5% in 2025: experts

The forecasts were presented by experts at the scientific conference titled ’Market and Price Developments in Việt Nam in 2024 and Forecasts for 2025’ organised by the Institute of Economics and Finance and the Price Management Department on January 9 in Hà Nội.
Banking industry to focus on bad debt handling targets in 2025

Banking industry to focus on bad debt handling targets in 2025

The non-performing loan (NPL) ratio of the banking system (excluding NPLs of weak commercial banks) needs to be controlled at below 3 per cent by the end of 2025.
State Bank sets higher credit growth target for 2025

State Bank sets higher credit growth target for 2025

The credit growth target for the banking system in 2025 has been set higher than in 2024.

More News

Outlook for lending rates in 2025?

Outlook for lending rates in 2025?

VCN - The economy is forecast to continue to recover strongly from the end of 2024 to 2025, helping credit demand increase rapidly, but lending interest rates may also be under increasing pressure.
Tax policies drive strong economic recovery and growth

Tax policies drive strong economic recovery and growth

VCN - Far more than just a revenue-collection agency, the Tax Department has played a pivotal role in creating a transparent, equitable, and business-friendly environment. These efforts have not only contributed to macroeconomic stability but also fueled recovery and development for businesses, individuals, and households.
E-commerce tax collection estimated at VND 116 Trillion

E-commerce tax collection estimated at VND 116 Trillion

VCN - According to data from the General Department of Taxation, taxes declared and paid directly by foreign suppliers via the electronic portal in 2024 amounted to VND 8.687 trillion, equivalent to 126% of the previous year’s total and a 74% increase compared to current appropriation.
Big 4 banks estimate positive business results in 2024

Big 4 banks estimate positive business results in 2024

One of the country’s biggest banks expects results to be the best for four years.
Flexible and proactive when exchange rates still fluctuate in 2025

Flexible and proactive when exchange rates still fluctuate in 2025

VCN - In the last days of 2024, as many forecasts, the US Federal Reserve (Fed) continued to cut interest rates, pushing the USD index up, creating pressure on domestic exchange rates. Therefore, domestic exchange rate management policies need to continue to be flexible and appropriate, thereby supporting businesses in import and export.
Issuing government bonds has met the budget capital at reasonable costs

Issuing government bonds has met the budget capital at reasonable costs

VCN - According to the State Treasury's report, capital mobilization through the issuance of government bonds has ensured mobilization to meet the capital needs of the state budget at reasonable costs.
Bank stocks drive market gains as VN-Index closes final Friday of 2024 on a positive note

Bank stocks drive market gains as VN-Index closes final Friday of 2024 on a positive note

Việt Nam’s stock market ended the final Friday of 2024 on a positive note, with banking stocks leading the rally and VN-Index successfully surpassing the 1,275-point mark.
Banks still "struggling" to find tools for handling bad debt

Banks still "struggling" to find tools for handling bad debt

VCN - According to financial experts, the rising trend in bad debt continues to pose significant challenges to debt resolution and recovery efforts at credit institutions (CIs).
Forecast upbeat for banking industry in 2025

Forecast upbeat for banking industry in 2025

In a recent report, ACB Securities Companies analysts said that the net interest margin (NIM) of banks in 2025 will increase by five basis points over 2024.
Read More

Your care

Latest Most read
SBV makes significant net withdrawal to stabilise exchange rate

SBV makes significant net withdrawal to stabilise exchange rate

Analysis shows it’s an intervention to manage system liquidity.
Việt Nam could maintain inflation between 3.5–4.5% in 2025: experts

Việt Nam could maintain inflation between 3.5–4.5% in 2025: experts

The forecasts were presented by experts at the scientific conference titled ’Market and Price Developments in Việt Nam in 2024 and Forecasts for 2025’ organised by the Institute of Economics and Finance and the Price Management Department on January 9 in Hà Nội.
Banking industry to focus on bad debt handling targets in 2025

Banking industry to focus on bad debt handling targets in 2025

The non-performing loan (NPL) ratio of the banking system (excluding NPLs of weak commercial banks) needs to be controlled at below 3 per cent by the end of 2025.
State Bank sets higher credit growth target for 2025

State Bank sets higher credit growth target for 2025

The credit growth target for the banking system in 2025 has been set higher than in 2024.
Outlook for lending rates in 2025?

Outlook for lending rates in 2025?

VCN - According to the SBV, in managing interest rates in 2024, the SBV will continue to maintain the operating interest rates amid the global world interest rates remaining at high levels.
Mobile Version