The State Bank of Ho Chi Minh City branch said that from the beginning of 2019, over 72,000 billion VND of bad debt has been handled. So far, bad debts of commercial banks in the city have decreased to VND 49,000 billion, accounting for 2.2% of total outstanding loans. If excluding non-performing loans of 3 banks, namely GPBank, Ocean Bank and CB Bank, the bad debt ratio of commercial banks in the area is only more than 1.5%.
This year, non-performing loans (NPLs) were mainly handled by selling collaterals and recovering debts in cash. Notably, among 460 bank branches in Ho Chi Minh City, there are 100 bank branches with profitable assets and no bad debts.
Mr. Nguyen Hoang Minh, Deputy Director of the State Bank Branch in Ho Chi Minh City, said that this new NPL was also less than the bad debt that was handled. Implementing Resolution 42, in the process of dealing with bad debts, commercial banks have obtained very good results. Customers are also less hesitant when dealing with bad debts by resolution 42 through the handling of collaterals.
Regarding the results of dealing with bad debts, in a report sent to the National Assembly on bad debt settlement results of credit institutions published in October, State Bank Governor Le Minh Hung said, the State Bank has directed credit institutions to actively improve the quality of assets, control credit quality, and limit the arising of new bad debts; handle bad debts on its own by measures to urge customers to repay debts; sell security assets of debts; sell debts under market mechanism; take advantage of risk provisions, and actively apply measures to deal with bad debts under Resolution 42.
At the same time, the credit institutions actively take measures to improve their risk management capacity and the quality of credit appraisal, as well as implement measures to prevent and control bad debts and handle bad debts.
As a result, NPLs of the system of credit institutions continued to be handled, controlled and maintained at less than 3%. From 2012 to the end of August 2019, the whole system of credit institutions has handled 968.89 billion VND of bad debt, of which bad debt handled by credit institutions was 629.2 thousand billion VND (accounting for 64.94% of the total bad debts handled). The remaining is debt sales (including selling debts to VAMC and other organizations and individuals), accounting for 35.06%. The ratio of bad debts in the balance sheet to the end of August 2019 was 1.98%.
Regarding the bad debt settlement results determined under Resolution 42, the Governor said that accumulated from August 15, 2017, to the end of August 2019, the whole credit institution system had handled 236.8 thousand billion VND of bad debt determined under Resolution 42 (excluding risk provisions and debts sold to VAMC through the issuance of special bonds).
In particular, dealing with bad debts in the balance sheet reached VND 137.7 trillion; dealing with debts which are being accounted off the balance sheet determined by Resolution 42 as VND 47.97 trillion; settlement of bad debts determined under Resolution 42 sold to VAMC and paid by special bonds is VND 51.12 trillion.
