The Viet Dragon Securities Company (VDSC) said that bad debts might continue to increase slightly this year, after a circular allowing banks to reschedule debt repayment periods and maintain the debt group for certain sectors expired at the end of 2024.

The Vietnam Asset Management Company (VAMC) has disclosed its plan to auction off bad debts from two clients, namely Phuc An Khang International Hospital Corporation and Binh Duong Construction Stone Co., Ltd.

Bad debts in the banking system in the first five months of 2024 continued to increase by some 75.9 trillion VND (3 billion USD) against the end of 2023.

The State Bank of Vietnam (SBV) has decided to allow commercial banks to reschedule the debt repayment period and maintain the debt group for certain sectors for an additional six months, to support struggling businesses.

Some banks, including MSB, Sacombank, VIB and Saigonbank, are expecting extraordinary revenues worth up to trillions of Vietnamese dong from debt recovery this year. In a recent report, Vietcombank Securities Company (VCBS) said Vietnam Maritime Commercial Joint Stock Bank (MSB) this year will record extraordinary income growth from bad debt recovery and capital divestment of its financial company TNEX Finance.

The settlement of bad debts will face many difficulties this year as there are no legal regulations related to repossessing collateral assets, industry insiders said.

The banking sector will continue to face great challenges in 2024, especially those from bad debts when Circular 02/2023/TT-NHNN of the State Bank of Vietnam on credit institutions and foreign bank branches' debt rescheduling and maintaining loan categories to help clients in difficulties expires on June 30, 2024.

Though the asset quality of banks in Vietnam will be temporarily under control until the end of 2023, experts said more attention should be paid to the issue in 2024 as bad debts are rising.

The State Bank of Vietnam (SBV) must ensure sufficient credit supply for the economy in the rest of this year, requested Prime Minister Pham Minh Chinh in a recent dispatch.

Increasing costs for credit risk provisions made many commercial banks’ profits decline in the third quarter of 2023.

Prime Minister Pham Minh Chinh has issued Decision 213/QD-TTg to establish a steering committee for restructuring the system of credit institutions.

After hitting a record low in 2022, Vietnam’s money supply (M2) will rebound in 2023 and become an important driver for the recovery of the stock market, KB Securities Vietnam (KBSV) forecast.

Amid rising non-performing loans (NPLs), many banks have strongly increased their loan-loss reserve (LLR) funds to readily face uncertainties in the future.

Besides interest and exchange rates, non-performing loans (NPLs) are also a concern for banking activities in the remaining months of 2022, experts have warned.

Banks are forecast to have a credit expansion at the end of the third quarter of 2022, according to Saigon Securities Incorporation.

National Assembly (NA) deputies on June 1 discussed the implementation of the socio-economic development plans and the state budget in 2021 and in the first months of 2022 as well as the settlement of bad debts of credits institutions.

The 10th session of the Standing Committee of the 15th National Assembly (NA) opened in Hanoi on April 14.

The scale of capital mobilisation through corporate bonds is forecast to decrease sharply, but there will be a drastic change in quality, according to a study on the corporate bond market by FiinRatings.

Many banks have set high profit ambitions for this year due to rising credit demand and the grand march of continued economic recovery.

The State Bank of Vietnam (SBV) has proposed to continually handle bad debts of credit institutions based on the provisions of pilot Resolution 42/2017/QH14 until 2025 instead of this year.