Vietnam listed banks’ bad debt up $2.3 billion in 9 months

By Thuy Yen, Minh Hue
Wed, November 6, 2024 | 3:14 pm GMT+7

The bad debt of listed banks in Vietnam continued to grow during the first nine months of 2024, with some seeing it increase as much as 70% from the end of 2023.

According to the State Bank of Vietnam (SBV), total credit in the banking system had risen 9% since the beginning of the year till September 30, up 16% compared to the same period last year.

This meant that the banking sector lent an additional VND1,200 trillion ($47.3 billion) in the period, achieving about 60% of the credit growth target set for the year. The remaining credit room for the fourth quarter is approximately VND800 trillion ($31.5 billion).

Experts have noted that demand for loans usually increases towards the end of the year, making the goal of pumping VND2,000 trillion ($78.8 billion) into the economy this year achievable.

However, bad debt has also grown significantly this year. Data on 27 banks listed on Vietnam’s stock exchanges showed that their total bad debt as of the end of September had reached VND251.5 trillion ($9.9 billion), up VND56.8 trillion ($2.3 billion) or 29% from the beginning of the year.

The bad debt ratio also climbed from 1.9% to 2.2%, still within the safe range by international standards.

LPBank's headquarters in Hanoi. Photo courtesy of the bank.

LPBank's headquarters in Hanoi. Photo courtesy of the bank.

LPBank, listed on the Ho Chi Minh Stock Exchange (HoSE) as LPB, saw the largest increase in bad debt.

At the end of Q3, its bad debt stood at VND6.27 trillion ($246.9 million), up 70% from the beginning of the year. The amount of potentially irrecoverable debt rose 2.3 times to VND2.72 trillion ($107.1 million), while overdue debt rose sharply by 73% to VND3.1 trillion ($122 million). The lender’s bad debt ratio increased from 1.3% to nearly 2%.

In the first nine months, LPBank was one of the most active lenders, with credit growth reaching 16.1%, well above the industry average and exceeding the sector's target for the entire year.

The areas that the bank increased lending to included wholesale and retail as well as car and motorcycle repairs, with loans rising from VND59.57 trillion to VND85.41 trillion ($3.36 billion).

MBBank (HoSE: MBB) recorded bad debt of VND15.68 trillion ($617.44 million) at the end of Q3, up nearly 60% from the year’s beginning. Of this, potentially irrecoverable debt surged 40% to VND4.05 trillion. Its bad debt ratio also rose from 1.6% to 2.2%.

MBBank also saw high credit growth at 14.9%. The bank disbursed nearly VND91 trillion ($3.58 billion) in nine months, with VND31.5 trillion going to wholesale, retail and vehicle repair sectors.

Many other banks reported bad debt balances rising by around 50%. These include BVBank (UPCoM: BVB), NamABank (HoSE: NAB), BacABank (HNX: BAB), and BIDV (HoSE: BID).

Notably, state-controlled BIDV surpassed VPBank (HoSE: VPB) to become the bank with the highest bad debt balance, reaching VND33.35 trillion ($1.31 billion), up 49.2% compared to the beginning of the year.

Its irrecoverable debt stood at VND18.29 trillion, up 40.5%. However, with a loan portfolio of more than VND1.9 trillion ($74.82 million) – the largest among listed banks – BIDV’s bad debt ratio remained at a safe 1.7%, up from 1.3% at the beginning of the year.

Eight banks had bad debt ratios exceeding the international safety threshold of 3%: National Bank (HNX: NVB), VPBank, BVBank, VIB (HoSE: VIB), Vietbank (UPCoM: VBB), ABBank (UPCoM: ABB), PGBank (UPCoM: PGB), and OCB (HoSE: OCB).

In 2023, the irrecoverable loans of National Bank surged from VND3.28 trillion to VND13.78 trillion ($546.2 million).

In the first nine months of 2024, VPBank reported a high bad debt ratio of 4.8%. Despite a 12% increase in credit growth, during the period, the bank was able to reduce its bad debt ratio from 5% to 4.8%, showing an improvement in its asset quality.

VPBank, Saigon-Hanoi Bank (HoSE: SHB) and OCB are among the few banks to report a decrease in their bad debt ratios compared to 2023.

Comments (0)
  • Read More
AI tool to help Vietnam curb tax evasion by e-commerce platforms: Deputy PM

AI tool to help Vietnam curb tax evasion by e-commerce platforms: Deputy PM

An artificial intelligence (AI)-based tool will be used to check revenues and trades on e-commerce platforms operating in Vietnam as part of a broader attempt to prevent tax losses, says Deputy Prime Minister Ho Duc Phoc.

Economy - Wed, November 6, 2024 | 2:12 pm GMT+7

Cambodia announces new initiative to encourage use of local currency

Cambodia announces new initiative to encourage use of local currency

The National Bank of Cambodia (NBC) and the country's Ministry of Commerce have recently announced a major step to promote the use of the local currency by encouraging businesses to register new bank accounts in riel.

Southeast Asia - Wed, November 6, 2024 | 2:02 pm GMT+7

Thailand, Turkey agree to resume FTA negotiations

Thailand, Turkey agree to resume FTA negotiations

Thai Deputy Commerce Minister Suchart Chomklin and his Turkish counterpart Mustafa Tuzcu have agreed to resume negotiations on a free trade agreement (FTA) between the two countries.

Southeast Asia - Wed, November 6, 2024 | 2:00 pm GMT+7

Singapore Airlines aims to attract high-spending passengers to longest flights

Singapore Airlines aims to attract high-spending passengers to longest flights

Singapore Airlines is planning to add a four-seat first class to the Airbus aircraft it uses for its longest routes, a bet to attract high-spending travelers to flights that can top 17 hours.

Southeast Asia - Wed, November 6, 2024 | 1:58 pm GMT+7

Indonesia eyes $120 bln investment for economic development

Indonesia eyes $120 bln investment for economic development

Indonesia aims to secure an investment of $120 billion by 2025 to promote its national economy, Minister of Investment Rosan Roeslani said on Monday.

Southeast Asia - Wed, November 6, 2024 | 1:56 pm GMT+7

Vietnam’s Jan-Oct industrial production grows 8.3%

Vietnam’s Jan-Oct industrial production grows 8.3%

Vietnam’s January-October index of industrial production (IIP) grew 8.3% year-on-year, extending the recovery of the sector, backed by a 4% increase from September to October, the General Statistics Office (GSO) said.

Economy - Wed, November 6, 2024 | 1:36 pm GMT+7

AES earns $27 mln pre-tax income from Vietnam coal-fired power plant in Jan-Sept

AES earns $27 mln pre-tax income from Vietnam coal-fired power plant in Jan-Sept

U.S.-based AES Corporation earned a pre-tax income of $27 million from the Mong Duong II coal-fired power plant in Vietnam’s northern province of Quang Ninh in the first nine months of this year.

Companies - Wed, November 6, 2024 | 12:06 pm GMT+7

Vietnamese businesses able to leverage e-commerce, overcome market challenges: experts

Vietnamese businesses able to leverage e-commerce, overcome market challenges: experts

Amidst the rapid expansion of low-cost Chinese e-commerce platforms like Temu, 1688 and Taobao, several Vietnamese businesses have managed to hold their own, showing how e-commerce can be leveraged to achieve success, experts say.

Finance - Wed, November 6, 2024 | 11:09 am GMT+7

Vietnam’s Eximbank seeks to move headquarters to Hanoi after ownership changes

Vietnam’s Eximbank seeks to move headquarters to Hanoi after ownership changes

Eximbank, among the leading mid-sized banks in Vietnam, has announced a plan to move its head office from Ho Chi Minh City, the largest economic hub in the south, to Hanoi after recent changes in shareholders.

Banking - Wed, November 6, 2024 | 10:41 am GMT+7

Coffee trading floor should be set up in Vietnam Central Highlands for risk management: experts

Coffee trading floor should be set up in Vietnam Central Highlands for risk management: experts

A coffee trading floor should be set up soon to set price benchmarks and manage market risks, experts said Sunday at a workshop.

Economy - Wed, November 6, 2024 | 8:18 am GMT+7

State utility EVN proposes trial of two-tier electricity pricing model

State utility EVN proposes trial of two-tier electricity pricing model

State utility Vietnam Electricity (EVN) has proposed piloting a two-tier electricity pricing mechanism for some customer groups before it is expanded nationwide starting January 1, 2025.

Economy - Tue, November 5, 2024 | 8:16 pm GMT+7

Registered FDI in Vietnam rises 1.3% in to $27.3 bln in Jan-Oct

Registered FDI in Vietnam rises 1.3% in to $27.3 bln in Jan-Oct

Registered foreign direct investment (FDI) in Vietnam totaled $27.26 billion in the first 10 months of this year, up 1.9% year-on-year, according to the Ministry of Planning and Investment.

Economy - Tue, November 5, 2024 | 5:35 pm GMT+7

Thailand’s Krungsri aims to wholly acquire Hanoi-based SHBFinance soon

Thailand’s Krungsri aims to wholly acquire Hanoi-based SHBFinance soon

Bangkok-domiciled Krungsri, officially known as Bank of Ayudhya Public Company Limited, has offered to acquire the remaining 50% stake in SHBFinance from private lender SHB before their initially agreed timeline.

Finance - Tue, November 5, 2024 | 4:23 pm GMT+7

LG Electronics to expand R&D operations in Vietnam to in-vehicle infotainment

LG Electronics to expand R&D operations in Vietnam to in-vehicle infotainment

LG Electronics is strengthening its research and development (R&D) capabilities in Vietnam and will expand its local research program into vehicle components, webOS platform, and home appliances.

Companies - Tue, November 5, 2024 | 3:28 pm GMT+7

BIDV cuts selling price of construction major’s mortgaged assets to $174 mln

BIDV cuts selling price of construction major’s mortgaged assets to $174 mln

State-controlled BIDV, a “Big 4” lender in Vietnam, has slashed the auction price of mortgaged assets held by Tai Nguyen Construction and Trading Company to VND4.41 trillion ($174.4 million).

Finance - Tue, November 5, 2024 | 3:16 pm GMT+7

Vietnam developer Novaland denies involvement in violations at Central Highlands property project

Vietnam developer Novaland denies involvement in violations at Central Highlands property project

Real estate major Novaland asserted on Monday that it was neither aware of nor involved in any violations of the law by its partner or other parties concerned in a Central Highlands eco-resort and urban area project.

Companies - Tue, November 5, 2024 | 2:36 pm GMT+7