LENDING & CREDIT | Cesar Tordesillas, Thailand

14 Vietnam banks make 62% of bad bank debts

Vietnam's 14 biggest banks accounted for as much as 62% bad debts of the whole banking system, based on yet another research report.

In this research report conducted by a bank two systems of classifying the banks were used. In the first one, they are grouped into state commercial banks; joint-stock commercial banks and foreign banks. In the second one, they are classified as big banks and “trouble” banks.

Under classification system 1, state commercial banks accounted for 50.5% bad debts, joint-stock commercial banks hold 27.8% and foreign banks suffer 4.2%, other credit institutions hold 17.5%.

While by the second classification system, 14 big banks hold 62% of bad debts while “trouble” banks hold only 10% and the rest hold 28%.

No one knows exact number of non-performing loans in Vietnam, as there have been so many versions of these. According to reports by credit institutions, bad debts as of May 31, 2012 accounted for 4.47% of total outstanding loans while according to the State Bank of Vietnam, the country’s central bank, bad debts as of March 31, 2012 were 8.6% of total outstanding loans.

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