The State Bank of Vietnam headquarter building in Hanoi. (Source: VNA) Hanoi (VNS/VNA) - The State Bank of Vietnam (SBV) has taken steps to tighten regulations over banks’ use of short-term deposits, reducing its ratio used to finance medium and long term loans from 60 percent now to 40 percent by September next year.
By the end of September 2021, banks are expected to cut it to 37 percent. From October 2021 to September 2020, the ratio must be reduced to 34 percent and from October 1, 2020 onward, it will be cut to maximum 30 percent.
The central bank’s policy aims to reduce risk, tighten control and to channel capital into priority sectors and small- and medium-sized enterprises, according to the SBV.
In a recent development, the latest quarter reports from several commercial banks cited by cafef.vn have shown positive earnings but also an increase in the number of non-performing loans (NPLs) compared to the same period last year.
By the end of September, 23 banks reported an alarming trend of NPLs rising. Notably, ABBank said its proportion of NPLs in total asset value increased by 79 percent, compared to the level at January 1, 2019, attaining 1.7 trillion VND (73 million USD). Its NPLs' share in total outstanding loans increases from 1.89 percent from the beginning of the year to 3.39 percent.
Reports from other banks also showed a 39 percent increase for SHB at 7.2 trillion VND, a 32 percent increase for Techcombank at 3.7 trillion VND and 30 percent increase for MBBank at 3.7 trillion VND.
The big four banks (Agribank, BIDV, Vietcombank and VietinBank) also reported similar findings with Vietcombank’s NPLs totalling 7.6 trillion VND and BIDV 22.4 trillion VND.
The SBV put total bad loans of 23 banks across the country at 94 trillion VND (4.05 billion USD), up 16 percent since the beginning of the year. NPLs have been on the rise even for banks with modest or no credit growth since the end of last year.
Notably, potentially irrecoverable debt according to the SBV’s standards has risen fast, with ABBank reporting more than 1trillion VND, Vietcombank 4.9 trillion VND and BIDV 12.2 trillion VND./.
VNA
