Local banks report low bad debt ratio
Local banks report low bad debt ratio
The bad debt ratio of the banking system was maintained low, at just over 2% last year, said Tran Dang Phi, deputy chief inspector of the Banking Inspection and Supervision Agency, under the State Bank of Vietnam (SBV).
At a press conference today, January 7, on the banking sector’s performance last year and plans for this year, Phi noted that the banking sector had achieved positive results last year, including the low bad debt ratio, as SBV and credit institutions had effectively executed the National Assembly’s Resolution 42 on the settlement of nonperforming loans on a trial basis and the prime minister’s decision on the restructuring of credit institutions in the 2016-2020 period.
The banking sector had focused on solutions for bad debt settlement, including liquidating assets mortgaged for loans and boosting control over credit quality to prevent new bad debts from rising.
According to the Government’s resolution on targets for this year, bad debts were expected to account for less than 2% of banks’ outstanding loans, which requires a great deal of efforts of the sector.
Phi stated that the central bank had proposed the Government ask the relevant ministries and agencies to coordinate with SBV to settle bad debts.
At the press briefing, SBV Deputy Governor Nguyen Thi Hong remarked that the central bank last year had ensured that credit growth matched macroeconomic development by adequately providing capital for the economy, especially for production and business activities, while keeping lending to risky sectors under control.
