Total non-performing loans jump to 66% from January to October.
The State Bank of Vietnam, the central bank, said NPLs in Vietnam's banking system reached 8.82% of total lending at the end of September and are now difficult to deal with.
Central bank governor Nguyen Van Binh also said NPLs rose 66% in the first 10 months but did not say whether that increase was from the same period of 2011. He revealed that NPLs increased 64% in 2011 and 41% in 2010.
"The bad debt issue could be resolved, but it is by no means easy," Binh said.
Vietnam has one of the highest levels of NPLs in Southeast Asia. Increasing levels of bad loans stem from years of very rapid credit growth intended to fuel economic expansion.
This year, a slowing economy and weak domestic consumption have worsened loan problems. The government said that unsold industrial product inventory in October was 20% higher than a year earlier.
Banks’ reports showed the NPLs at 4.9% as of Sept. 30, but several lenders that earlier reported NPLs at 1% to 3% have been found by inspectors to have far higher levels.
Some 80%of the bad debts are mortgage-based while 46% of all loans have real estate mortgages, he said.
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