Eight Vietnamese listed banks report 15,000 billion VND bad loans the last 9 months

This figure accounts for only about 2% of total loans of the 8 banks but is showing signs of rapidly increasing in the first nine months in 2011.

In October, eight banks, whose shares are listed on the two Hanoi and Ho Chi Minh City Stock Exchanges are the ACB, Vietinbank, Eximbank, Habubank, Southern Bank, Saigon – Hanoi, Sacombank and Vietcombank have announced third quarter results and the first 9 months.

One point worth noting that bad debts in most banks, compared with the end in 2010, are growing fast.

Specifically, Vietcombank is the bank with total loans (including subprime loans, bad debts difficult to recover) value of approximately VND 7,380 billion, equivalent to the rate of more than 3.9% of outstanding debt (close to VND 188,500 billion). This rate is also the largest of eight banks and grew fastest compared with 2.8% at the end of 2010.

Two other banks also having fast increase of bad loans ratio the past nine months are ACB and Vietinbank (CTG) at a rate around 1.4 – 1.5% compared to 3.9% of VCB, but compared to the end of 2010 the proportion of bad loans at ACB and Vietinbank have increased 2 and 3.7 times. Due to large loans, the total value of bad loans  at the two bank also reached more than 4,800 billion VND. NPL ratio in the remaining five banks ranged from 0.6 to 2.8% of total loans. Among them bad loan at Sacombank (STB) are at the lowest rate (0.6%) with a value equivalent to VND 460 billion.

Credit quality and revenues the last 9 months of the eight banks

Unit: billion VND

	ACB	CTG	EIB	HBB	NVB	SHB	STB	VCB
Outstanding	99.719	271.676	69.524	18.685	12.869	28.252	80.149	188.472
Bad debts	1.071	3732	1.043	447	366	438	457	7.380
Net profit	2.101	4.129	2028	392	147	533,5	1.594	3.309
Growth	15%	49%	65%	-6%	30%	32%	6%	6%

A detail worth noting is that in VND 14,934 billion of bad debts of banks, up to 8,293 billion are debts of group 5 (debts may not be recovered), accounting for more than 55%. This type of debt also tends to increase in most banks.

The bad debt is becoming a matter of concern but also according to business reports for the last 9 months, eight listed banks have a positive net profit. In particular, bank has the largest bad debt – Vietcombank – also the largest amount of profit (nearly 3,309 billion, 6% growth).

The Bank has the highest growth over the same period is Eximbank (reaching 2,101 billion, up 65%), followed by Vietinbank (nearly 4,130 billion, up 49%). Habubank is the only bank which saw its profits retreating down 6% over the same period in 2010.

In the discussions about the economic situation  at the National Assembly on 27 Oct, Nguyen Ba Thanh – Member of Finance Committee – Budget said: Based on the data reported by banks the total bad debt of the whole system are about VND 75,000 billion. Of these, nearly 50% of group 5 debt – debt may not be recovered.
Nhat Minh VN Express – translated by Richard Lee