Although the debt restructuring policy of the State Bank of Vietnam (SBV) has been implemented since April, many banks continued to see bad debt increasing in the second quarter, putting the banking industry and the economy at risk. A big concern is when bad debt will peak out. Debt restructuring and bad debt At a conference held last month to review the performance of the banking system in the first half of the year, the SBV reported that since Circular 02/2023/TT-NHNN took effect on April 24 till the end of June, over 18,000 bank clients had had their debts restructured, i.e. the payment extended and the debt groups kept unchanged, with total principal and interest amounting to VND62,500 billion. Despite such measures, financial statements for the second quarter show bad debt further increased at several banks. This had been anticipated, but the reality still caused concern. At MSB, for example, bad debt had risen from 1.71% early this year to 2.56% by end-June, with the absolute amount of bad debt, or non-performing loans, increasing by 69% to VND3,496 billion. At TPBank, bad debt had almost tripled during the period to VND3,912 billion, rising from a ratio of 0.84% to 2.21%. […]