In the first half of 2023, in the context of deteriorating economic health, the bad debt balances of many banks increased rapidly. Of the 29 banks that have published financial statements, only two have recorded a decrease in bad debt at the end of the second quarter of 2023 compared to the beginning of the year.
Many banks recorded bad debt growth at double digits. In particular, there was bank whose bad debt nearly tripled, creating great pressure on risk provisions for banks.
As of June 30, 2023, VPBank had nearly VND 32,000 billion of debt in groups 3, 4 and 5, an increase of 26.5% compared to the beginning of the year. Agribank ranked second with a Bad debt balanceof nearly VND 30,500 billion, up 17.1%.
BIDV's bad debt has increased by more than 47% in the past 6 months, reaching nearly VND 26,000 billion at the end of the second quarter and VietinBank has about VND 17,300 billion of non-performing loans.
The last representative of the Big4 group, Vietcombank, ranked in the 7th position with a bad debt balance of nearly VND 9,800 billion.
This bank’s on-balance sheet bad debt ratio is among the lowest of the 29 banks that have published financial statements. In addition, Vietcombank also leads the group of 29 banks in terms of bad debt coverage ratio.
Total bad debt balance from 29 banks increased by 33.7% within 6 months, reaching nearly VND 220,000 billion. Only two banks, SHB and Kienlongbank, recorded an improved bad debt balance, down 3.4% and 6.5%, respectively.
In general, in the context of economic difficulties, it is normal for the bad debt of the banking industry to go up as predicted by many experts. Banks have also made certain preparations to deal with risks from bad debts.
With the rich experience accumulated over the past 15 years, experts believe that bad debt is still under control and does not cause systemic risks for banks.
According to a recent survey by the State Bank of Vietnam (SBV), credit institutions assessed that the ratio of non-performing loans to outstanding loans of the banking system showed a "slight increase" in the second quarter of 2023 but is expected to decrease in the third quarter of the year.
Compiled by VietnamCredit