VAMC's head office in downtown Hanoi. Photo: Internet
Non-performing loans accounted for 2.46% of total credit in the Vietnamese banking system as of November 30, 2016, below the whole-year target of 3%, the State Bank of Vietnam
(SBV) said in a press release on January 4.
The bad debt
ratio slipped because banks boosted lending to meet growing demand for credit in the final months of the year.
Total outstanding loans expanded 18.71% in the year to December 29, in line with the central bank’s credit growth target of 18-20%, according to the press release. The credit growth in 2015 came at 17.29%.
The total money supply, meanwhile, increased 17.88% in the same period. Total capital mobilization at banks grew 18.38%.
The fall in the bad debt ratio was also due to the operation of the SBV-run Vietnam Asset Management Company (VAMC
). In the 11 months through November, the firm bought 839 debts worth 23.28 trillion dong ($1.03 billion) at book value for 22.48 trillion dong.
HSBC in a recent note warned that “the underlying credit and associated capital impairment risks continue to lie with the banks” as a large amount of trouble loans remain stocked at VAMC.