Bad debts hit 4.58 percent of loans at end-July

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Bad debts accounted for 4.58 percent of total loans by Vietnamese banks at the end of July, an official newspaper has reported.

Based on commercial banks' reports, their non-performing loans totaled VND138.98 trillion (US$6.58 billion) in July, the central bank-run Banking Times newspaper said.

The State Bank of Vietnam, the central bank, has yet to report its number on banks' bad debt as of July. Its data often differs from that given by commercial banks.

According to the central bank, the bad-debt ratio at the end of June was 4.46 percent. Based on reports from commercial banks, the ratio at the end of April was 4.67 percent, higher than the end-July level.

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Independent experts have estimated that the levels of bad debt at Vietnam's bank could be considerably higher than reported.

To deal with bad debts, the central bank in July launched an asset firm to buy them from banks, a move touted as one of its biggest reforms but widely seen as a band-aid fix for its ailing, credit-starved economy.

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