ASEAN KEY DESTINATIONS
Bad debts approach $14.6b as economic woes continue
HA NOI - The total bad debt of commercial banks has reached nearly VND308 trillion (US$14.6 billion), accounting for 9.71 per cent of the total outstanding debt, deputy chief inspector of the State Bank of Viet Nam Dao Quang Tinh said on Friday.
He said at a press briefing that the figure had however been revised to VND122 trillion ($5.58 billion), accounting for 3.86 per cent of the total outstanding debt by the end of February after debt restructuring.
He said ongoing economic difficulties had contributed to the figure.
The National Financial Supervisory Commission (NFSC) had said earlier at a seminar that the bad debt was approximately 9 per cent instead of the 15 per cent assessed by the rating agency Moody's.
Vice President Nguyen Quoc Hung of the Viet Nam Asset Management Company (VAMC) said they had purchased VND35 trillion ($1.6 billion) in bad debts so far.
VAMC had to date worked with credit institutions to recover VND420 billion of bad debt, Hung said, adding that the company had made a list in preparation for selling bad debts in the secondary market.
For this, VAMC would classify assets related to the property market, including industrial zones, hospitals, high-rise buildings and offices in Ha Noi, HCM City and Da Nang, Hung said.
Tinh also said at the press briefing that the deposit ratio had risen five times compared to credit growth. As of April 22, credit growth had increased 0.62 per cent over the same period a year earlier, while deposits were up 3.09 per cent. Total liquidity increased 3.93 per cent and the interest rates on deposits fell between 0.5-1.5 per cent. Lending rates for priority industries also fell 1 per cent.
Since the Government launched a VND30 trillion ($1.41 billion) loan package for home-buyers and property developers 10 months ago, commercial banks had signed credit agreements worth VND3,291 trillion ($156 million), of which VND1,894 trillion ($90 million) had been disbursed, it was said at the press briefing.
Two credit packages
The central bank will release two credit packages at preferential interest rates to the fishing and coffee industries.
Accordingly, a VND10 trillion, or US$476.19 million, credit package will be set aside for fisheries at a preferential interest rate of 5 per cent yearly, with a maximum loan term of 10 years.
The credit will allow businesses and fishermen to build new iron hull ships and upgrade old ships for offshore work. The investment is to link the value chain from exploitation of resources, farming to processing, consumption, while sticking to the agriculture restructuring plan approved by the Prime Minister in June last year.
Along with that, the central bank will also prepare a credit package of up to VND12 trillion, or $571.428 million, for replanting of coffee trees in the Central Highlands at preferential interest rates.
In addition, the central bank will coordinate with the Ministry of Agriculture and Rural Development in developing and approving the plan for coffee tree replanting to help farmers get bank loans. — VNS
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below