Businesses and local people in HCM City have had relatively low demand for capital due to the negative impact of the COVID-19 pandemic, resulting in the city’s credit growth in the first half of 2020 falling to its lowest level for many years.
Commercial banks cut interest rates on 980 trillion VND (42.6 billion USD) worth of loans to support 318,000 COVID-19 affected individual and corporate borrowers by the end of April, the latest data from the State Bank of Vietnam (SBV) showed.
Credit institutions in Vietnam settled more than 26.94 trillion VND (1.17 billion USD) of non-performing loans (NPLs) in the first quarter of this year.
Many banks in Ho Chi Minh City are selling their mortgaged assets, mainly properties worth trillions of Vietnamese dong, to speed up the resolution of bad debts.
The Bank for Investment and Development of Vietnam (BIDV) has cleared all non-performing loans it had previously sold to the Vietnam Asset Management Company (VAMC), the bank’s Chairman Phan Duc Tu said.
The join-stock bank Sacombank has said its last year’s pre-tax profits amounted to 3.217 trillion VND (about 139 million USD), 21.4 percent higher than its plan for the year.
It was a surprise as a number of domestic commercial banks have reported big profits after years of poor performance, but this showed the country’s business environment has improved.
The Southeast Asia Joint Stock Commercial Bank (SeABank) has completed the early redemption of all special bonds at the Vietnam Asset Management Company (VAMC), thereby helping the bank proactively monitor and handle bad debts.
The ratio of bad debts in the domestic banking system will be dropped below 3 percent by the end of 2020, making contribution to restructuring the macroeconomic policy.
Nearly 9.6 trillion VND (417.3 million USD) worth of bad debts were handled each month from August 15, 2017 to August 31, 2019, or 4.7 trillion VND higher than that during the 2012 – 2017 period.
The "Vietnam: Strengthening banking sector soundness and development" project is expected to help the State Bank of Vietnam to better anticipate and increase resilience to shocks.
The World Bank (WB) and the State Bank of Vietnam (SBV) on October 1 inked a grant agreement worth 2.2 million USD to implement a project aimed at strengthening the soundness and resilience of Vietnam’s banking sector.
Though many banks have posted positive profits in the first half of 2019, their bad debts have continually increased in the wake of high credit growth in risky business segments.