Banks Faces VND37 Trillion Loan Losses

by lexie Thu Oct 27, 2011 5:12 pm

October 27, 2011

Banks Faces VND37 Trillion Loan Losses

Local lenders recorded VND37 trillion category 5 debts (uncollectible) as of August, 2011. Although debts in category 5 (loss) represented only 1.58% of total loans in the whole system, they made up 49.29% of the total bad debts.

As of August, 2011, total outstanding loans in the banking system amounted to VND2,389 trillion ($114.1 billion) in which 90.89% are in category 1 (pass) debts, 5.89% in category 2 (special mention), and VND76.736 trillion or 3.21% in substandard loans, the newspaper quoted a report from the central bank.

As many as 39 out of 114 credit institutions faced higher bad debts ratios in August, the newspaper said, citing Vietbank, Vinasiam Bank, United Overseas Bank, etc. Vietinbank and Vietcombank were also reported to cut credit lines for unsecured loans in the interbank market on concerns over bad debts.

The State Bank of Vietnam said it would provide liquidity support to ailing credit institutions to ensure the health of each lender and to consolidate the banking system.

http://www.vietfinancenews.com/2011/10/banks-faces-vnd37-trillion-loan-losses.html