Vietcombank's bad debts in the first three quarters of 2020 rose by 36 percent compared to the beginning of the year to nearly 7.88 trillion VND (Photo: VNA) Hanoi (VNS/VNA) - Non-performing loans (NPLs) among commercialbanks increased sharply in the first three quarters of this year due tothe adverse impacts of the COVID-19 pandemic.
Areport from Viet Dragon Securities Co showed that NPLs at 17 bankshad jumped by 31 percent at the end of the third quarter against the end oflast year to 97.28 trillion VND (4.19 billion USD). The amount accounted for1.8 percent of the banks’ total assets.
Specifically,Vietcombank's NPLs rose by 36 percent compared to the beginning of the year tonearly 7.88 trillion VND. Of which, sub-standard debts surged by 4.2 times to 2.92trillion VND, and doubtful debts grew by nearly three times. The ratio of NPLsover total outstanding loans increased from 0.79 percent at the end of 2019 to1.01 percent.
VietinBankreported that NPLs had gone up 66 percent to 17.94 trillion VND, lifting thebank’s bad debt ratio from 1.16 percent to 1.87 percent.
TPBankhad bad debt of 59 percent at 1.97 trillion VND, accounting for 1.79 percentof its total outstanding loan balance.
Sacombank’sbad debts also edged up 19 percent to nearly 6.84 trillion VND.
ACB'sbad debts at the end of September were 2.48 trillion VND, up 71 percent fromthe beginning of this year. ACB's ratio of NPLs over total outstandingloan balance also increased from 0.54 percent to 0.84 percent.
MBBank'sbad debts rose by more than 39 percent to 4.03 trillion VND, causing theratio of NPLs over total outstanding loan balance to increase from 1.16 percentto 1.5 percent.
Manysmall commercial banks have also seen their bad debts increasing sharply.
Kienlongbank’sbad debts jumped to 2.24 trillion VND, 6.5 times higher compared to thebeginning of this year, while debts at VietBank rose by 61 percent to867 billion VND, dragging its bad debt ratio from 1.32 percent to 2.03 percent.
MSB'sbad debts surged by 31 percent to 1.70 trillion VND, while LienVietPostBank hada total bad debt of 2.61 trillion VND by the end of the third quarter of thisyear, up 29 percent.
CanVan Luc, a member of the National Advisory Council on Financial and MonetaryPolicies, attributed the surge in bad debt to the impacts of the COVID-19pandemic, which had caused a reduction in revenue making it difficult forborrowers to repay their loans.
Ifthe pandemic continues to cause difficulties for enterprises, internationaltrade, and services, bad debts of the banking system will probably increase inthe coming time, Luc said.
Bankingexpert Nguyen Tri Hieu said the sharp increase in bad debts in the first ninemonths of this year was not surprising in the wake of the pandemic, and was aglobal issue.
Hieunoted the bad debt situation this year was clearly worse than that in 2019 andwould continue to increase, so banks should be cautious./.
VNA
