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
State-owned housing developer HUD has new chairman

State-owned housing developer HUD has new chairman

Dau Minh Thanh, chief of the Ministry of Construction (MoC) Office, has been appointed chairman of the ministry’s Housing and Urban Development Corporation (HUD).

Companies - Sun, November 17, 2024 | 9:34 pm GMT+7

Vietnam private lender LPBank reports $394 mln profit in 10 months

Vietnam private lender LPBank reports $394 mln profit in 10 months

Hanoi-based Loc Phat Vietnam Joint Stock Commercial Bank, or LPBank, logged an after-tax profit of VND10 trillion ($394 million) in the first 10 months of this year, said its leadership at the EGM on Saturday.

Banking - Sun, November 17, 2024 | 3:30 pm GMT+7

Vietnam stock market unlikely to experience further steep declines in next sessions: experts

Vietnam stock market unlikely to experience further steep declines in next sessions: experts

The probability of continued sharp falls in the Vietnamese stock market over the next sessions is relatively low, barring unexpected geopolitical turbulences that could cause significant volatility, according experts.

Finance - Sun, November 17, 2024 | 1:30 pm GMT+7

Taiwan’s Cooler Master gets nod for $125 mln additional investment in northern Vietnam

Taiwan’s Cooler Master gets nod for $125 mln additional investment in northern Vietnam

Taiwan-headquartered Cooler Master, a global computer hardware giant, especially in cooling devices, will invest an additional $125 million in the northern province of Bac Ninh, according to a project report.

Industries - Sun, November 17, 2024 | 10:00 am GMT+7

Vingroup’s hospitality arm Vinpearl becomes public company as part of listing plan

Vingroup’s hospitality arm Vinpearl becomes public company as part of listing plan

Vinpearl JSC, a hospitality subsidiary of conglomerate Vingroup, has completed its registration as a public company, the State Securities Commission of Vietnam (SSC) said on Friday.

Companies - Sun, November 17, 2024 | 9:00 am GMT+7

Vietnam pledges to make more contributions to APEC cooperation

Vietnam pledges to make more contributions to APEC cooperation

APEC leaders adopted a joint statement and endorsed two signature initiatives proposed by host country Peru: the Lima Roadmap to Promote the Transition to Formal and Global Economy and the Ichma Statement on a New Look to Advance the Free Trade Area of the Asia-Pacific.

Politics - Sun, November 17, 2024 | 8:05 am GMT+7

Construction of $2.3 bln central Vietnam LNG power plant to restart in 2026

Construction of $2.3 bln central Vietnam LNG power plant to restart in 2026

Construction of the 1,500-MW Hai Lang Power Center project in Quang Tri province will restart on January 1, 2026, the project investor has informed local authorities.

Energy - Sun, November 17, 2024 | 8:00 am GMT+7

PM arrives in Brazil, beginning trip to attend G20 Summit

PM arrives in Brazil, beginning trip to attend G20 Summit

Prime Minister Pham Minh Chinh, his spouse and a high-ranking delegation of Vietnam arrived in Rio de Janeiro, Brazil on November 16 afternoon (local time), beginning their three-day visit to attend the G20 Summit and have bilateral meetings.

Politics - Sun, November 17, 2024 | 7:30 am GMT+7

Vietnam-China partnership to enable export of Kim Long brand cars

Vietnam-China partnership to enable export of Kim Long brand cars

Vietnam’s Kim Long Motor and Futa Group have struck a strategic cooperation agreement with China’s Dongfem Dana that will enable the production and export of cars under the Kim Long brand, executives said Friday.

Companies - Sat, November 16, 2024 | 7:13 pm GMT+7

Northern Vietnam province attracts $124 mln investment from Taiwan firm

Northern Vietnam province attracts $124 mln investment from Taiwan firm

Taiwan-based Nien Made Enterprise Co., Ltd. will invest $124.1 million to make furniture accessories at Phu Ha Industrial Park in the northern province of Phu Tho.

Industries - Sat, November 16, 2024 | 7:01 pm GMT+7

Vietnam’s first LNG-fired power plants to enter commercial operation in Jun-Sept 2025

Vietnam’s first LNG-fired power plants to enter commercial operation in Jun-Sept 2025

Nhon Trach 3 and Nhon Trach 4, Vietnam’s first LNG-to-power plants, will begin commercial operations in June and September 2025, respectively, says project investor PV Power.

Energy - Sat, November 16, 2024 | 3:20 pm GMT+7

Vinhomes spends $276 mln on buying back 162 mln shares, more than half to go

Vinhomes spends $276 mln on buying back 162 mln shares, more than half to go

Vinhomes, the largest housing developer in Vietnam, has spent around VND7 trillion ($275.7 million) on implementing its record buyback plan since kick-starting it on October 23.

Finance - Sat, November 16, 2024 | 1:21 pm GMT+7

Indonesia secures funding for green power infrastructure at COP29

Indonesia secures funding for green power infrastructure at COP29

Indonesia has attracted EUR1.2 billion ($1.26 billion) worth of green funding for the electricity sector from Germany’s Kreditanstalt für Wiederaufbau (KfW) at the 29th UN Climate Change Conference of the Parties (COP29) in Baku, Azerbaijan.

Southeast Asia - Sat, November 16, 2024 | 10:10 am GMT+7

Hanoi-based fledgling firm spends $12.3 mln on buying 17.2 mln shares of lender VIB

Hanoi-based fledgling firm spends $12.3 mln on buying 17.2 mln shares of lender VIB

Hanoi-based Quang Kim Development and Investment JSC acquired 17.2 million shares of Vietnam International Commercial Joint Stock Bank (HoSE: VIB) on Monday.

Banking - Sat, November 16, 2024 | 9:47 am GMT+7

Vietnam can utilize Trump’s policies to enhance position in global supply chains: experts

Vietnam can utilize Trump’s policies to enhance position in global supply chains: experts

Vietnam can take the advantage of protectionist economic policies by Donald Trump, the 47th president of the U.S., to strengthen its position in global supply chains, attract foreign investment, and drive sustainable economic growth, write Dr. Tran Ngoc Mai and Prof. Dr. Doan Ngoc Thang, lecturers at the Banking Academy of Vietnam.

Economy - Sat, November 16, 2024 | 9:30 am GMT+7

Former provincial Party chiefs receive warnings for Thuan An Group-related violations

Former provincial Party chiefs receive warnings for Thuan An Group-related violations

The Politburo, Vietnam’s highest decision-making body, has issued warnings to Nguyen Xuan Ky, former Party chief of Quang Ninh province, and Bui Van Cuong, former Party chief of Dak Lak province, for violations related to Thuan An Group.

Politics - Sat, November 16, 2024 | 9:24 am GMT+7