Vietnam’s total outstanding loans at about $125b

As reported by the State Bank of Vietnam (SBV), the total outstanding loans for the economy is equal to 1.2 times against the country’s GDP in 2010, the local newswire Thanh Nien quoted data from the central bank.
Accordingly, as of June 10, the bad debt of the entire banking system accounted for 2.72% of the total outstanding loans, up 0.55% from late 2010.

The latest data from SBV showed till the end of April, standardized debts of the banking system accounted for about 92% of the total outstanding loans, falling nearly 20 trillion dong from March.

This means that the debts of remaining groups accounted for 8% of the total outstanding loans, of which, the debts of group 3-5 saw a rise of 0.14% from March. In particular, the debt of group 3 increased nearly 0.09%, group 4 up 0.02% and group 5 surged 0.04%.

According to the central bank, currently, the total outstanding loans of the whole banking system are equal to 1.2 times of the country’s GDP in 2010. With the GDP of over $104 billion in 2010 (data from General Statistics Office), the total outstanding loans for the economy are about nearly $125 billion.

According to the most reliable data, till the end of May, amongst 100 credit institutions, only 30 of them reached the ratio of standardized debts at 100% including 20 foreign banks and 10 noncredit institutions.

Noticeable loans and bad debts are concentrated mainly in local commercial banks.

According to the Decision No 493/2005/QD-NHNN dated April 22, 2005, credit institutions classify debts into five groups including:

* Category 1 (pass): debts that are not due and the borrower is able to pay the principal and interest of debts in full and in a timely manner.

* Category 2 (special-mention): debts that are overdue less than 90 days and rescheduled debts that are not due;

* Category 3 (sub-standard): debts that are overdue from 90 to 180 days and rescheduled debts that are overdue less than 90 days;

* Category 4 (doubtful): debts that are overdue from 181 to 360 days and rescheduled debts that are overdue from 90 to 180 days;

* Category 5 (loss): debts that are overdue more than 360 days, rescheduled debts that are overdue more than 180 days and debts that are subject to rescheduling arrangements as directed by the Government. – Vietbiz24

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial