Major firms sell off assets on the cheap amid credit crunch: minister
Cash flow troubles have forced many major companies in Vietnam to sell off assets at prices much lower than their market value, Minister of Planning and Investment Nguyen Chi Dung said on Tuesday.
“Many large enterprises have had to sell assets at a 50% discount, and most buyers are foreign companies. We have warned about this many times," he told a meeting hosted by the National Assembly’s Standing Committee on socio-economic issues.
"Businesses have been facing cash flow difficulties due to hiccups in operating credit policies.”
The minister added that the Vietnamese monetary market was basically stable in the first four months of this year, but lending interest rates remained high, averaging 9.56% per annum. In the year to April 24, credit supply in the country grew only 2.66% from a year earlier, showing that businesses were facing difficulties and had limited access to capital sources.

Minister of Planning and Investment Nguyen Chi Dung speaks at a National Assembly meeting in Hanoi on May 9, 2023. Photo courtesy of the government portal.
Like Dung, National Assembly (NA) Vice Chairman Tran Quang Phuong pointed out details of the financial burden. He said many businesses claimed they had to use up their reserves over the past two years, and these resources are running low.
Vu Hong Thanh, head of the legislative body's Economic Committee, said: "Issuing shares and corporate bonds has become tough, so capital mobilization for the economy is not working.”
He noted that non-performing loans at banks would rise if tough conditions prolong. Citing a report by the National Financial Supervision Commission, Thanh said the average NPL ratio of the whole banking system by the end of this March was 2.88%, up from 2.05% at the end of 2022. Some banks are close to their capital adequacy ratio (CAR) minimum levels, which means they face pressure to increase capital in the near future.
"It is necessary to shift from tightening credit to easing this supply and continuing to lower policy interest rates to drive growth as inflation pressure has eased from the end of 2022," Thanh said.
Vietnam obtained 8.2% GDP growth last year and a government report on the first four months showed a positive economic performance, but NA Vice Chairman Phuong said the report was “rather rosy”.
He noted that economic growth showed signs of decline at the end of Q3/2022; therefore the government needs to re-evaluate as Q1/2023 posted slow growth of 3.32%.
The vice chairman asked the government to clarify woes in the ailing real estate market and corporate bond issuances, and identify weaknesses among banks that have not been completely resolved. "The government also needs to assess the economy's resilience to external impacts, and definitively tackle cross-ownership and "backyard businesses" of banks."
Members of the NA Standing Committee also mentioned local officials who fear the consequences of possible errors, saying being afraid to take responsibility hinders growth.
Nguyen Thi Thanh, head of the Committee for National Assembly Deputies Affairs, said this fear has reached an alarming level. She noted that city and provincial officials often send questions to ministries instead of proactively solving issues, while ministries, in reply, say they need to observe the laws.
She said the government needs to work out a more efficient way to deal with this time-consuming problem.
Minister of Planning and Investment Dung, at a meeting chaired by Prime Minister Pham Minh Chinh last month, said his ministry received 584 documents containing questions on administrative and legal issues from the Ho Chi Minh City administration last year.
“However, most of the questions were within the city’s power to answer. This is absurd, and shows that we are afraid of responsibility.” The minister urged HCMC officials to change their attitudes to better serve the city’s growth.
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