Viet Nam News HÀ NỘI – Governor of the State Bank of Việt Nam Lê Minh Hưng has urged credit institutions and foreign banks’ branches to further speed up the settlement of non-performing loans (NPLs). Under Document No 8425/NHNN-TTGSNH issued last week, the Governor instructed the institutions to better implement Directive No 05/CT-NHNN, which was issued in September to regulate the structure of credit institutions associated with dealing with bad debts in the 2016-20 period. Accordingly, credit institutions must review and provide detailed roadmaps and solutions for settling their bad debts every year until 2022. Credit institutions are also required to actively look for buyers for the debts they sold to the Việt Nam Asset Management Company (VAMC). Previously, banks had to sell their debts to the VAMC to keep their NPL ratios below 3 per cent as regulated by the central bank, but they still had to make provision for the debts. … [Read more...] about Credit institutions urged to resolve bad debts
Provisions for bad debts journal entry
SBV needs to speed up bad debt resolution
Viet Nam News HÀ NỘI – The State Bank of Việt Nam (SBV) needed to speed up the resolution of non-performing loans (NPLs) to bring down the bad debt ratio of the entire banking system – including both NPLs owned by credit institutions and the Việt Nam Asset Management Company - to below 3 per cent by 2020. Deputy Prime Minister Vương Đình Huệ on Tuesday made the statement at a conference to review application of the National Assembly’s Resolution 42/2017/QH and Prime Minister’s Decision No 1058/QD-TTg on the structure of credit institutions (CIs) system associated with dealing with bad debts in the 2016-20 period. The NPL ratio at credit institutions must be reduced to a safe level according to international rules, Huệ noted. Nguyễn Văn Du, the SBV’s deputy chief inspector, said that after a year of implementing the regulations, the financial status of CIs had been … [Read more...] about SBV needs to speed up bad debt resolution
Vietnam needs a public transaction floor for bad debts
Nguyen Tri Hieu, a banking expert, tells Hai Quan (Customs) newspaper that the Government should appoint an agency to develop an official transaction floor for buying and selling debt. What’s your assessment of bad debt settlement in our banking system now? According to the latest report, bad debt in our banking system has reduced to 2.18 per cent. This percentage indicates that banks have reduced their bad debt risks. This is a positive sign. However, over the last five years, just 1.4 per cent of the bad debt ratio was reduced. In my opinion, this result is not really optimistic. The problem here is that many banks still accept risks by lending money to real estate developers, to consumers or investors in stock exchange and others. These are the key reasons making the bad debt in the banking system to more than 2 per cent. It is a common sense that if the banking sector has a low risk level it should have a bad debt ratio less than 1 per cent. In my opinion the 2.18 per cent … [Read more...] about Vietnam needs a public transaction floor for bad debts
Việt Nam needs a public transaction floor for bad debts
Nguyễn Trí Hiếu. — Photo baohaiquan.vn Nguyễn Trí Hiếu, a banking expert, tells Hải Quan (Customs) newspaper that the Government should appoint an agency to develop an official transaction floor for buying and selling debt. What’s your assessment of bad debt settlement in our banking system now? According to the latest report, bad debt in our banking system has reduced to 2.18 per cent. This percentage indicates that banks have reduced their bad debt risks. This is a positive sign. However, over the last five years, just 1.4 per cent of the bad debt ratio was reduced. In my opinion, this result is not really optimistic. The problem here is that many banks still accept risks by lending money to real estate developers, to consumers or investors in stock exchange and others. These are the key reasons making the bad debt in the banking system to more than 2 per cent. It is a common sense that if the banking sector has a low risk … [Read more...] about Việt Nam needs a public transaction floor for bad debts
Bad debt ratio drops to 2.18% in five years
Viet Nam News HÀ NỘI - The non-performing loan (NPL) ratio at Việt Nam’s credit institutions has dropped from 3.61 per cent in 2013 to 2.18 per cent currently, according to the Việt Nam Asset Management Company (VAMC). Deputy governor of the State Bank of Việt Nam (SBV) Nguyễn Kim Anh hailed the operation of VAMC over the past five years, saying that the company contributed significantly to lowering the NPL ratio of the entire banking system to below 3 per cent, while supporting enterprises during the debt-restructuring process. According to VAMC chairman Nguyễn Tiến Đông, until June 30 this year, nearly VNĐ310.52 trillion (US$13.5 billion) of NPLs were resolved through VAMC, accounting for 40 per cent of the entire banking system’s total NPLs. Of the total, VAMC coordinated with credit institutions to recoup nearly VNĐ100 trillion. Thanks to the National Assembly’s new resolution on NPL effective … [Read more...] about Bad debt ratio drops to 2.18% in five years