Bad Debt Ratio in HCM City Slides to 3.9% in September

Tuan Minh

20:06 30/09/2017

BizLIVE - Bad debts at ailing banks still form a large portion in the city.

Bad Debt Ratio in HCM City Slides to 3.9% in September

Bad debt in HCM City has dwindled.

Non-performing loans at banks in Ho Chi Minh City totaled some 60 trillion dong ($2.64 billion) at the end of September 2017, accounting for 3.9% of total credit in the city, down from 4.04% recorded for December 2016.
Of the sum, trouble loans at three banks acquired by the State Bank of Vietnam (SBV) at zero cost in 2015 – Vietnam Construction Bank, OceanBank and GPBank – amounted to over 20 trillion dong.
If this amount is excluded, the bad debt ratio in the city will be 2%, said Nguyen Hoang Minh, deputy director of the SBV’s HCM City branch.
Minh noted that the legal framework for the handling of bad debt was limited before, with the process lasting one to two decades in some cases.
A National Assembly resolution, which took effect on August 15, has cleared the path for bad debt solution, by allowing banks to repossess mortgage.
The official informed that total outstanding loans in the metropolis reached 1,700 trillion dong ($74 billion) at the end of September, up 12.4% from last December. Of the sum, 79% was funneled into production and business, 10.8% into real estate and 10.2% into consumption.
Meanwhile, deposits at banks increased 8.5% to nearly 2,000 trillion dong, of which 11.94% were in foreign currency.