Dinar Daily
Welcome to Dinar Daily Discussions.

Logging in with your USERNAME allows you to participate in discussions, see what has recently been posted, and other options. Guests can post but they do have limited abilities.

We are NOT a guru forum. We are a dinarian forum. The opinions expressed on the forum do not reflect the of opinion of Dinar Daily specifically, but rather reflect the views of the individual posters only.


We are in compliance with, "Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use."

Key Words
Adam Montana, AdminBill, Benjamin Fulford, Currency Exchange, David Schmidt, Dinar, Dinar Guru, Dinar Recaps, Dinar Rv, Dinar Scam, Dr Clarke, Frank26, Gary Larrabee, Gurus, Guru Hunters, JerzyBabkowski, Kaperoni, Kenny, Monetary Reform, Mnt Goat, My Ladies, Okie, Poppy, RamblerNash, Ray Renfrow, Redenomination, Revaluation, Ssmith, TNTBS, Tnt Tony, WING IT, We Are The People, Willis Clark, WSOMN, Yosef, Zap

Vietnam - Bad debts up, banks may lose 33 trillion dong

Post new topic   Reply to topic

Go down

Vietnam - Bad debts up, banks may lose 33 trillion dong

Post  lexie on Mon Oct 31, 2011 9:39 am

October 31, 2011

Bad debts up, banks may lose 33 trillion dong

Experts have repeatedly given warnings about the bad debt increases, which they believe a big worry to the banking system. The bad debt ratio has increased from 2.53 percent to 3.21 percent if compared with August 2010.

According to the State Bank of Vietnam, by the end of August 2011, the first-group debts had accounted for 90.89 percent of the total outstanding loans, while the second-group debts had amounted to 5.89 percent. Meanwhile, the bad debts of third, fourth and fifth groups had reached to 3.21 percent.

In Vietnam, loans can be classified into five groups, with the fifth group debts considered the worst debts which can be irrecoverable.

If compared the figures with that of July 2011, one would see that the first group debts increased by 0.37 percent, second group decreased by 0.44 percent, while bad debt ratio increased by 0.07 percent.

The bad debt ratio of 3.21 percent by the end of August 2011 is described as “acceptable”. However, there are two worrying problems: 1) banks may lose 33 trillion dong, because debtors prove to be unable to pay debts, and 2) the north of the central region has emerged as the “black point” which is the source of a lot of bad debts.

The overall picture

The total outstanding loans by the end of August 2011 had reached 2.3 million of billions of dong, an increase of 34 trillion dong, or 1.45 percent over the previous month and 9.58 percent if compared with December 31, 2010.

The good thing that can be seen in the figures is that the first group debt has increased by 40 trillion dong after decreasing in July 2011. It was because the second group debt decreased to 5.89 percent, down by 0.44 percent from the previous month.

However, though the diagram shows the positive signs of the first and second group debts (first group debt up, second group debt down; the debts of the two groups account for 96.78 percent of the total outstanding loans), the worries about bad debts still exist.

By the end of August 2011, the bad debt had been over 76 trillion dong, and if considering the bad debt growth rate, the bad debt ratio of August still increased by 0.07 percent over July 2011. The problem is that since the beginning of the year, the bad debts have been increasing continuously, from 2.53 percent in August 2010 to 3.21 percent in August 2011.

Of the total bad debt of 76 trillion dong, the third group debt accounts for 30.18 percent, the fourth group debt 20.53 percent and fifth group debt 49 percent. This means that credit institutions may lose 33 trillion dong.

Analysts have pointed out that the bad debt ratio is still within the safety line. However, the worrying thing is that the fifth group debt is now accounting for up to 1.58 percent of total outstanding loans, and 50 percent of the subprime debts.

Of the current 114 credit institutions, 39 banks have subprime debt ratios increasing significantly. Especially, the bad debt ratio has been increasing rapidly at some joint stock banks.

Meanwhile, ABBank has emerged as the bank which can control the bad debt very well. The bank has been found as having the first group debts increasing most sharply among joint stock banks, by 3.67 percent, and having the second group debts decreasing mostly sharply, by 3.43 percent.

Biggest debtors in the north of the central region

By the end of August 2011, the outstanding loans provided to the north of the central region had increased by 2.3 trillion dong over July 2011, or 2.15 percent. If compared with December 31, 2010, the figure would exceed 13 trillion dong, or 13 percent.

The bad debt situation in the north of the central region has really caused a big worry to the credit institutions that have disbursed money for the economic institutions in the region

The subprime debts of the region had climbed to 2.1 trillion dong by the end of August 2011, accounting for 2.8 percent of the subprime debts of the whole banking system.


Elite Member
Elite Member

Posts : 1812
Join date : 2011-06-24

View user profile

Back to top Go down

Back to top

Permissions in this forum:
You can reply to topics in this forum