ASEAN KEY DESTINATIONS
Vietnam central bank sees 2008 bad debts under 4%
Vietnam's total bad debts in the banking system are unlikely to exceed 4 percent by the end of the year, Reuters quoted a central bank official as saying.
Total non-performing debt as of the end of September was 35 trillion dong ($2.1 billion), or 2.92 percent of overall outstanding loans, Deputy Central Bank Governor Nguyen Dong Tien said in a government banking report seen on Sunday.
Banks have set aside reserves of 22 trillion dong to deal with bad debts, Tien said.
Tien's bad debt figures are much higher than those reported by state media last week of around 22 trillion dong at the end of September, and forecast to rise to 30 trillion dong by the end of 2008.
"No commercial bank is losing its ability to meet payment," Tien said, adding that total deposits have risen more than 16 percent from the beginning of the year.
Last year Vietnam cut its bad debt ratio to 2 percent of loans totalling around $65 billion from 2.65 percent in 2006.
Tien said debt relating to real estate projects now was more than 100 trillion dong, 9.15 percent of banks' total outstanding loans.
The real estate market was buoyant until early 2008 when the economy slowed. Property prices have since fallen 30 percent or more in some areas, adding to the volume of bad debt.
Vietnam's central bank tightened monetary policy in the first nine months of 2008 as it tried to slow credit growth to its 30 percent target after a 54 percent surge last year.
Loans grew only 18 percent in the January to September period from the same period last year, slowing from an annual rise of 30 percent in the first nine months of 2007, the central bank has said.
In October, the bank cut its three main interest rates for the first time this year to support the economy and limit the impact of the global financial crisis.