City banks' non-performing loans still high
During a meeting
between representatives of Ho Chi Minh City-based banks and the local
National Assembly delegation on October 14, he said that borrowers of
the bad debt were mainly real estate firms, consumer firms and small-
and medium-sized firms.
Finance leasing companies
had the highest bad debt ratios among credit institutions with bad debts
accounting for more than 44 per cent of their total outstanding loans
in the first nine months – seven times the ratio of the city's whole
finance-banking industry.
Foreign banks had the lowest NPL ratio of 2.93 percent, according to the official.
However, experts said that the public should not be concerned about
the sky-high bad debt ratios of financial leasing companies, as their
assets only accounted for about 4 percent of the total assets of all
credit institutions.
The main clients of these
companies are enterprises that need specific equipment, such as that
used in construction, textile and garment production and shipbuilding.
A senior executive of Vietcombank's finance leasing
company, who declined to be named, said the current legal framework had
only loose asset leasing provisions, meaning risk for the companies was
high.
Banks in the southern hub are expected to sell
as much as 6 trillion VND (272.72 million USD) worth of bad debts to
the Vietnam Asset Management Company (VAMC) before the end of the year.
Besides SCB and Southern Bank, which sold 1.3
trillion VND (59.09 million USD) of bad debts to VAMC late last week,
other lenders including Vietcombank and Navibank also plan to ease their
bad debt burden by selling NPLs to the debt trading firm.
In the first half of this year, 14 commercial banks in the city set
aside 2.3 trillion VND (104.54 million USD) in provision for loan losses
and used the provision to tackle nearly 1 trillion VND (45.45 million
USD) of bad loans.-VNA