The combined bad debts of BIDV, Vietcombank and Vietinbank reached more than 23.1 trillion VND (1.1 billion USD) in the first half of the year, according to the composite mid-year financial report of the three leading commercial banks.

The debt figure of the three major banks made up nearly all bad debts in the domestic banking system, which totalled about 24 trillion VND (1.14 billion USD) in six months.

Bad debts reached 9.4 trillion VND (447.6 million USD) at BIDV, 6.7 trillion VND (319 million USD) at Vietcombank, and more than 7 trillion VND (333.3 million USD) at Vietinbank.

In terms of percentages, however, bad debts were highest at Sai Gon-Hanoi Bank at 9 percent, followed by Navibank at 6.1 percent, and Techcombank at 5.28 percent.

While the Government recently required lending institutions with bad debt ratios of 3 percent or higher to sell debts to the Vietnam Asset Management Company, most banks have announced "safe" bad debt levels.

Asia Commercial Bank posted 2.99 percent, Sacombank 2.55 percent, Vietinbank 2.1 percent,Vietcombank 2.81 percent, Eximbank 1.49 percent, and Military Bank 2.44 percent.

These low ratios were due to the banks' significant outstanding loans, according to financial analysts.
State Bank of Vietnam Deputy Governor Dang Thanh Binh told a meeting earlier this week, however, that many banks are hiding bad debts so that they could present brighter financial reports.

John Sheehan - managing director of the Southeast Asia branch of Capital Services Group, told the media that domestic banks didn't want to publicise accurate debt figures due to pressure from shareholders and fears of losing capital and prestige or causing share slumps on the stock market.

Lawyer Truong Thanh Duc from the Basico Law Co said that inexact data could lead to an even worse bad-debt situation. He warned that over optimism about quick market recovery might cause bad debts to even double.

Tran Thi Hong Hanh, Secretary of the Banking Association, urged banks to look straight into their debt situation. "Without being aware of the real situation, they can't work out proper solutions to their problems. If this is prolonged, they will suffer more losses with more stagnant operations," she said.

"Can banking supervisory agencies operate efficiently without grasping precise data?" Binh asked, pushing for supervision to be strengthened to provide a stable monetary market and healthy business environment.-VNA