This is the reality stated by Mr. Do Giang Nam - Chairman of the Debt Settlement Club, member of the Board of Members, Asset Management Company of Credit Institutions (VAMC) - at the seminar "Bad debt settlement - Current situation and solutions" organized by the Vietnam Banking Association in Ho Chi Minh City, August 2.
The latest updated data was provided by Mr. Le Trung Kien - Deputy Director of Department 4, Banking Inspection and Supervision Agency, State Bank - showing that the reports of credit institutions, bad debt on the balance sheet of the entire system by the end of June 2024 increased by 5.77% compared to the end of last year.
The bad debt ratio is at 4.56%, higher than the 4.55% at the end of 2023 and the 2.03% at the end of 2022. The bad debt of the credit institution system is at a high level and continues to increase mainly from the group of commercial banks, in which SCB is the bank with the largest on-balance sheet bad debt.
According to Mr. Do Giang Nam, the credit institution system's on-balance sheet bad debt in 2023 will be 4.55%, up from 2.03% in 2022, due to negative fluctuations in the world economic situation and domestic difficulties.
Notably, the bad debt ratio of the whole system is controlled below 3% but bad debt in 5 banks has exceeded this level. Among them, some banks have seen a sharp increase in bad debt.
Bad debt is increasing but banks are having headaches in the process of handling and recovering debt due to many factors.
"Bad debt is increasing but the debt collection and settlement work of banks is facing many difficulties. The real estate market is still quiet - accounting for about 70% of total assets securing loans at banks (at some banks up to 80% - 90%). Many banks have accelerated the liquidation of assets to recover debt, but due to weak liquidity, many valuable real estates have had to reduce prices dozens of times but are still sluggish" - Mr. Do Giang Nam said.
Mr. Nguyen Quoc Hung, General Secretary of the Vietnam Banking Association, also said that the process of handling bad debts of credit institutions still faces many obstacles due to customers having difficulties, not being able to pay debts or even delaying payment, not cooperating in handling secured assets. The lengthy processes, procedures of litigation and enforcement of judgments cause costs, the value of secured assets decreases. There are cases where customers intend to create a dispute with a third party, leading to the enforcement of judgments being delayed and prolonged...
Mr. Nguyen Quoc Hung proposed that competent authorities should supplement legal regulations allowing credit institutions that are the secured parties of bad debts to seize collateral, contributing to speeding up the progress of handling bad debts. At the same time, supplement regulations on coordination mechanisms and support from local authorities and police agencies for credit institutions in seizing collateral of bad debts...
Source: https://nld.com.vn/khong-de-doi-ngan-hang-dau-dau-voi-no-xau-gia-tang-196240802204149039.htm
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