Bad debts of 20 banks up 4.5% in 2020

Feb 9th at 08:34
09-02-2021 08:34:45+07:00

Bad debts of 20 banks up 4.5% in 2020

The non-performing loans (NPLs) of 20 local banks at the end of 2020 rose by 4.5 per cent year-on-year to VND83.4 trillion (US$3.58 billion), according to the banks’ latest financial statements.

 

Fifteen of the banks reported a decrease in bad debt ratio last year, with some successfully controlling the ratio at below 1 per cent.

As of December 31, 2020, the bad debt ratio of Vietnam Technological and Commercial Joint Stock Bank (Techcombank) was 0.5 per cent, lower than the 1.3 per cent recorded as of December 31, 2019. The bank currently has the lowest bad debt ratio in the sector.

For Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), the bad debts at the end of 2020 were VND5.22 trillion, down by more than 50 per cent. The bad debt ratio of the bank sharply dropped from 1.01 per cent at the end of the third quarter of 2020 to 0.62 per cent at the end of 2020, also the lowest level in the bank’s history.

At Asia Commercial Joint Stock Bank (ACB), the ratio of bad debts on outstanding credit inched up from 0.54 per cent to 0.6 per cent. However, the rate was among the lowest levels in the system.

Similarly, the bad debt ratio of Bac A Commercial Joint Stock Bank (BacABank) slightly increased but was still controlled below 1 per cent. The bank’s ratio of bad debts on outstanding credit rose from 0.69 per cent as of late 2019 to 0.79 per cent.

The fifth bank with bad debt ratio of less than 1 per cent was Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank). According to the bank’s financial statement, the ratio of bad debts as of December 31, 2020 was 0.94 per cent, down compared to the 1.16 per cent at the end of 2019. This was also the lowest bad debt ratio in the 2016-20 period of VietinBank.

Nam A Commercial Joint Stock Bank (NamABank)’s bad debt ratio was also below 1 per cent. The bank’s total bad debts decreased by nearly half from the previous year to VND744 billion, helping the bad debt ratio to fall from 1.97 per cent to 0.83 per cent.

The year saw KienLongBank as the bank with the highest growth in bad debt ratio. The bank’s NPLs jumped 5.5 times to VND1.88 trillion.

However, the NPLs of the banks would be higher if including debts that were restructured to aid COVID-19 affected borrowers according to the Government’s incentive policy.

The State Bank of Viet Nam reported commercial banks restructured loans worth about VND350 trillion for COVID-19 affected borrowers by the end of 2020.

Banking expert Can Van Luc said if half of the loans became bad loans, the bad debt ratio would increase to more than 3 per cent by the end of 2021.

To control the risk of bad loans, banking expert Nguyen Tri Hieu recommended as well as recovering bad loans, banks must set aside provisions for bad loans and risky loans.

Some banks have already increased provisions. VietinBank, for example, increased its provisions from 120 per cent to 130 per cent. 

bizhub



RELATED STOCK CODE (1)

NEWS SAME CATEGORY

Vietnam, Japan banks provide joint financial services

The Saigon Commercial Joint Stock Bank (SCB) has recently entered into a strategic cooperation deal with Kiraboshi Business Consulting Vietnam, the representative...

Banking system works to ensure cash supply for Tet

The State Bank of Viet Nam (SBV) has requested its branches, credit institutions, foreign bank branches, and the National Payment Corporation of Viet Nam (NAPAS)...

FE Credit experiences 16.3 per cent drop in pre-tax profit as NPLs increase in 2020

Due to the COVID-19 pandemic, FE Credit – Vietnam's largest consumer finance company – reported a decrease in its pre-tax profit while its non-performing loans...

Agribank up 17 places in Brand Finance Banking 500

The Vietnam Bank for Agriculture and Rural Development (Agribank) jumped 17 spots to rank 173rd in the recently announced Brand Finance Banking 500 list for 2021...

What was Shinhan Bank up to in 2020?

In the year 2020, the world has seen tremendous changes due to negative impacts caused by Covid-19 pandemic. However, with strong financial power, diversified...

Insurance segment sits in good stead

Despite several challenges stemming from intense competition, the health crisis, and low interest rates, the local insurance landscape is predicted to maintain its...

Which Vietnamese banks have been keeping NPLs under 1 per cent?

While a number of banks experienced sharp increases in non-performing loans (NPLs) due to the unprecedented pandemic, some lenders have successfully kept their NPL...

New bank frauds emerged as Tet nears

Customers are urged to stay cautious against rampant scam and fraud activities ahead of Tet holidays.

Top 10 banking profit list sees places change

While the list of the 10 most profitable banks remained unchanged last year, the impact of Covid-19 caused major changes in rankings.

Blueprint builds on hopes for cross-border tax collection

Vietnam’s cross-border tax management in 2021 is foreseeing an optimistic outlook thanks to the validity of some related regulations from late last year. However...

Bank stocks

Insurance stocks


MOST READ


Back To Top