Financial companies rarely publish financial statements, but the activities of financial companies that are subsidiaries of the bank are still revealed through the parent bank's financial statements. With the main product being consumer loans, the bad debt ratio of financial companies is often much higher than that of banks. In addition to the loan growth figures, these companies' bad debt ratios are also very interested in the market.
By the end of September 2019, the total consolidated loan balance of VPBank was VND 254,186 billion, an increase of 14.5% compared to the beginning of the year. In particular, outstanding loans to customers of VPBank were VND 189,534 billion, up 12.7%. According to that, FE Credit's loan balance is estimated at over 64,600 billion VND, up by 20% YoY and continues to have the largest market share in the consumer credit market.
VPBank's consolidated inter-bank bad debt is VND 8,881 billion, of which VND 5,516 billion is from the parent bank and about VND 3,365 billion is from FE Credit. Accordingly, the estimated FE ratio of FE Credit at the end of September 2019 was at 5.2%, this number has continuously decreased since the beginning of the year until now. Previously, the bad debt ratio of FE Credit as of December 30, 2018, was 5.98%; As of June 30, 2019, it was 5.35%.
At MBBank, as of September 30, the bad debt of the consolidated bank was VND 3,703 billion, up 29% compared to the beginning of the year. In particular, the possibility of losing capital increased by 40% to 1,348 billion. The ratio of bad debts to total outstanding loans to customers increased from 1.33% to 1.54%.
Meanwhile, according to the separate financial statements, the bad debt at the parent bank at the end of September was VND 3,112 billion, up 23% compared to the beginning of the year. Therefore, the estimated bad debt at subsidiary MCredit is about 590 billion VND.
The total outstanding loan at the end of September of MBBank was VND 240,211 billion. In particular, outstanding loans of individual banks were VND 230,143 billion and VND 2,564 billion loans at MBS. Accordingly, it is estimated that MCredit's customer loan balance is about VND 7,504 billion. Meanwhile, the bad debt of MCredit is estimated at about 590 billion, accounting for 7.9% of the total outstanding loans to customers of this financial company. This rate increased sharply compared to the beginning of the year - only about 6%.
At HDBank, at the end of September 2019, the consolidated NPL of the consolidated bank was VND 2,097 billion, up 11% compared to the beginning of the year. The ratio of bad debts to total outstanding loans to customers of the consolidated bank is 1.49%.
Particularly, the parent bank had a bad debt of VND 1,415 billion, accounting for 1.09% of the total customer loan balance. Therefore, the estimated bad debt of HD Saison is about VND 682 billion, accounting for 6.21% of the total outstanding loans of this financial company. Thus, the bad debt ratio of HD Saison at the end of September decreased slightly from 6.3% at the beginning of the year.
In the structure of bad debts of financial companies, most of them are debts in group 3 and debt in group 4; while debt group 5-debt ability to lose capital accounts for a very low rate. For example, at FE Credit, group 3 debt is more than VND 3,200 billion, accounting for more than 95% of the total bad debt. Similarly, at HD Saison, group 5 debt accounted for only 4% of the total bad debt.
By: Ngoc Bich - Translated by VietnamCredit