Vietnam banks' bad debt up at 3.21 pct of loans in Aug

TN News

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Bad debts at Vietnam's banks have risen to 3.21 percent of outstanding loans at the end of August, from 3.04 percent a month earlier, a central bank report on Tuesday said.

"Bad debt has been rising gradually every month so far this year," the report said.

Loans at the banks totaled VND2,389 trillion ($114.1 billion) at the end of August, the report said.

Bad debt in the banking sector has increased by 0.68 percentage points from 2.53 percent at the end of August 2010, it said.

Vietnam's rapid economic growth in the past few years has been largely fueled by credit expansion, with loans rising 27.65 percent last year, 37.7 percent in 2009 and 53.8 percent in 2007, central bank data showed.

Several banks, including major listed banks, were among those with increasing non-performing loans, the newspaper said.

Bad debts accounted for 3.47 percent of Vietcombank's loans, while Agribank, Vietnam's largest lender, had 6.67 percent of loans as bad debt at the end of August, the ruling Communist Party's bureau overseeing state-run businesses has said.

Economists and bankers said non-performing loans may be far above the published data, because large lending in real-estate with the property used as collateral could add bad debts to the banking system, according to state media.

The State Bank of Vietnam said on Tuesday it plans to restructure the banking system in the next five years and consider merger and acquisition activities the "indispensable trend" for the lenders.

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