Vietnam hammers hard on bad loans as banks clear $6.42b in soured assets in 2018

This brings the bad loan ratio to 1.89% in 2018 from 1.99% in 2017.

Vietnamese banks were unrelenting in their bad loan crackdown as lenders handled $6.42b (VND149.22t) in non-performing loans (NPL) in 2018 to bring down the soured debt ratio to 1.89% from 1.99% in 2017, reports Viet Nam News.

Also read: Vietnam steps up efforts to boost weakened banking sector

The headline figure represents the lowest level since 2012 and also fells below the threshold of 2% targeted for the end of 2019.

Also read: Vietnamese banks' 2018 pre-tax profit surges 40% as bad debt crackdown pays off

The soured loans of 15 banks including VPBank, Vietcombank, Sacombank, MBBank, Techcombank, VIB, LienVietPostBank, ACB, ABBank, TPBank, PGBank, BacABank, VietBank, Saigonbank and Kienlongbank crashed by 17.7% to $1.49b (VND34.81t) by end-2018.

Vietcombank reduced its bad loans by over VND1.2t in Q4 to drive down its bad debt ratio to 0.98% or the lowest in the country’s banking system. Saigonbank booked one of the most notable performance as its bad loans crashed by as much as 66% in Q4 2018 to bring its bad debt ratio to 2.22% in 2018 from 2.98% in 2017.

Sacombank and PGBank both saw a drop to its bad debt from 4.7% to 2.11%; and 3% from 4.5% over the same period.

The central bank still considers handling bad debt amongst its top priorities in 2019.

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