Vietnam hammers hard on bad loans as banks clear $6.42b in soured assets in 2018

This brings the bad loan ratio to 1.89% in 2018 from 1.99% in 2017.

Vietnamese banks were unrelenting in their bad loan crackdown as lenders handled $6.42b (VND149.22t) in non-performing loans (NPL) in 2018 to bring down the soured debt ratio to 1.89% from 1.99% in 2017, reports Viet Nam News.

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The headline figure represents the lowest level since 2012 and also fells below the threshold of 2% targeted for the end of 2019.

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The soured loans of 15 banks including VPBank, Vietcombank, Sacombank, MBBank, Techcombank, VIB, LienVietPostBank, ACB, ABBank, TPBank, PGBank, BacABank, VietBank, Saigonbank and Kienlongbank crashed by 17.7% to $1.49b (VND34.81t) by end-2018.

Vietcombank reduced its bad loans by over VND1.2t in Q4 to drive down its bad debt ratio to 0.98% or the lowest in the country’s banking system. Saigonbank booked one of the most notable performance as its bad loans crashed by as much as 66% in Q4 2018 to bring its bad debt ratio to 2.22% in 2018 from 2.98% in 2017. 

Sacombank and PGBank both saw a drop to its bad debt from 4.7% to 2.11%; and 3% from 4.5% over the same period.

The central bank still considers handling bad debt amongst its top priorities in 2019.