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Thursday, March 28, 2024

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Legal gap in handling bad debt

The progress in resolving bad debt could face a setback due to a significant legal loophole: the right to seize collateral from defaulting borrowers is no longer enforceable following amendments to the Law on Credit Institutions. This change places increased pressure on banks to meticulously assess lending decisions, aiming to minimize the inherent risks associated with debt recovery. Bad debt continues to loom large Accompanying the growth in revenue and profits in 2023, financial reports from certain banks highlighted a significant uptick in non-performing loans. While subprime and doubtful debts in the second and third groups declined, there was a surge in the fifth group, comprising debts with very low debt collection ability. Techcombank saw bad debt climb from VND3,032 billion at the close of 2022 to nearly VND6,000 billion by the end of 2023. Consequently, the bad debt ratio soared from 0.74% to 1.19%, prompting the bank to bolster its bad debt provisions. Techcombank’s provisions for non-performing loans amounted to VND1,634 billion by the end of 2023, a significant increase from VND691 billion in the fourth quarter of 2022. Throughout the year, the bank allocated a total of VND3,921 billion for bad debt provisions, doubling the figure from 2022. […]
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Spike in non-performing loans puts banks at risk

HCMC – Concerns are mounting as debts transition into doubtful debts and potentially bad debts at commercial banks. As of the end of the third...

The renewed fear of bad debt

Bad debt is rising again, prompting concerns among banks and authorities, after a long period of strong efforts being taken to control credit quality...

Banks see bad debt rising

HCMC – Tough business conditions, mostly in the real estate sector, led bad debt in the banking system soaring from 2% early this year...

Borrowing just to pay off debt

The State Bank of Vietnam (SBV) has issued Circular 06/2023/TT-NHNN allowing clients to borrow from one bank to pay debt owed to another bank....

Bad debt worries

The State Bank of Vietnam (SBV) has recently sounded the alarm over the escalating volume of bad debt within the real estate sector, substantiated...

Central bank raises alarm as real estate non-performing loans surge

HCMC – The rise in non-performing loans within the real estate sector has become a cause for alarm as the bad debt ratio escalated...

Banks see bad debt soaring

HCMC – Bad debt in Vietnam's banking system soared in the first half of this year and is expected to rise further in the coming months. The...

Flaws in bank restructuring found

HCMC – Flaws in the restructuring of banks in Vietnam have been exposed by a recent investigation conducted by the Government Inspectorate. The report highlights...

Woes persist despite interest rate cut

Contrary to expectations, the stock market has remained lackluster since the State Bank of Vietnam (SBV) lowered key interest rates in late May. U.S. debt...

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