Bad debt ratio among banks drops sharply to 6.7 percent
Vietnam’s finance and banking sector has reduced its ratio of non-performing loans (NPLs) – including both NPLs owned by credit institutions and the Vietnam Asset Management Company – from 17.2 percent in 2012 to 6.7 percent at the end of June 2018.
Vietnam’s finance and banking sector has reduced its ratio of non-performing loans to 6.7 percent at the end of June 2018 (Photo: VietinBank)
Hanoi (VNS/VNA) – Vietnam’s finance and bankingsector has reduced its ratio of non-performing loans (NPLs) – including bothNPLs owned by credit institutions and the Vietnam Asset Management Company –from 17.2 percent in 2012 to 6.7 percent at the end of June 2018.
The assessment was made by analysts at the Bank forInvestment and Development of Vietnam (BIDV)’s Research Centre.
According to analysts, the achievement was partly thanks tomore reasonable credit growth. Annual credit growth rate in the 2011-17 periodwas 14.3 percent, much lower than the 34 percent rate recorded from 2006-10.
Liquidity at banks has been also stable in the past fiveyears, with the loan-to-deposit ratio (LDR) declining from 98 percent at the endof 2011 to 87 percent at the end of 2017, while lending interest rates havegradually fallen and averaged 9.8 percent from 2011-17, down from 12.3 percentfrom 2006-10.
According to BIDV’s report, risk management capacity atcommercial banks had improved significantly and banks were expected to meetBasel II standards by 2020 as part of the central bank’s plan. Basel II, whichcomprises minimum capital requirements, supervisory review and marketdiscipline, aims to enhance competition and transparency in the banking systemand make banks more resistant to market changes.
Most commercial banks are planning to apply Basel IIstandards, and some have completed the implementation of Basel II’s riskmanagement system and a few have started to apply all Basel II standards.
Confidence in domestic banks had also improved significantly,according to BIDV’s report, noting that international ratings agencies such asFitch and Moody’s had upgraded the ratings for 12 Vietnamese banks in May andAugust this year.
Profitability among banks, securities and insurance companieshad also risen with return on assets (ROA) and return on equity (ROE)increasing sharply in recent years.
At the same time, domestic financial institutions have alsobecome more transparent with 23 of 35 banks being audited by internationalauditing firms. Sixteen banks, 26 of 85 securities companies and 10 of 50insurance companies have so far also listed on the domestic stock exchanges,the report noted.-VNS/VNA
The Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has pledged to finish settling all of the 100 trillion VND (4.38 billion USD) of its bad debts in five years, instead of 10 years as stated in the restructuring plan approved by the State Bank of Vietnam.
The ratio of the non-performing loans (NPLs) at commercial banks fell from 3.61 percent at the end of 2013 to 2.18 percent at present, according to Chairman of the Vietnam Asset Management Company (VAMC) Nguyen Tien Dong.
Settling non-performing loans (NPLs) has been easier since the application of Nation Assembly’s Resolution 42 a year ago, but detailed guidance is still needed to make the use of the regulation smoother, industry insiders said.
The State Bank of Vietnam (SBV) needed to speed up the settlement of non-performing loans (NPLs) to bring down the bad debt ratio of the entire banking system, including both NPLs owned by credit institutions and the Vietnam Asset Management Company (VAMC), to below 3 percent by 2020.
The Government is directing ministries and agencies to raise capital for State-owned commercial banks through the use of dividends or share sales this year, Deputy Prime Minister Vuong Dinh Hue said at a recent meeting.
The new Government decree also simplifies loan procedures while expanding credit incentives to include organic and circular agriculture, allowing them to access preferential terms similar to those of high-tech and value-chain based agricultural production.
Developed with state-of-the-art infrastructure, the Da Nang FTZ is designed to become a leading regional economic centre and a strategic growth pole in Vietnam’s new development landscape.
The Binh Duong Association of Supporting Industries (BASI) is expected to promote the usage of domestically manufactured components while supporting businesses in accessing international markets, strengthening linkages, and promoting deeper integration into global supply chains.
PwC Vietnam forecasts a vibrant M&A market in Vietnam’s healthcare sector in 2025, driven by rising demand for high-quality medical services and a growing middle class. Pharmaceutical companies, private hospitals, and specialised medical facilities, particularly in ophthalmology and oncology, are predicted to be key targets for M&A.
The central province of Quang Nam is set to become a hub for the medicinal plant industry, with Ngoc Linh ginseng designated as the core crop, under the Prime Minister's decision issued earlier this year.
The North-South Expressway project is scheduled for completion by 2030, aiming to establish the groundwork for Vietnam’s modern railway industry and stimulate regional economic development, positioning the country for a significant economic leap in the era of national rise.
The probe, initiated on June 11 following a petition by the US Coalition for Fair Trade in Hardwood Plywood, targets products classified under HS Code 4412 and 9403 imported from China, Indonesia and Vietnam.
Sun PhuQuoc Airways was born as a perfect piece in Sun Group’s strategic vision to build a premium ecosystem of tourism, entertainment, real estate, and aviation. With a pioneering ambition, Sun PhuQuoc Airways is not just an airline, but a symbol of connection – bringing the world to Phu Quoc and taking Phu Quoc to the world.
A key change in the draft decree is a provision requiring bank transfers for gold transactions valued at 20 million VND (765 USD) and above, to enhance transparency and verify customer identities.
In the first four months of 2025, trade turnover between Vietnam and Cambodia surpassed 3 billion USD, marking a 7% increase compared to the same period in 2024.
On June 19 alone, a total of 2,005 trucks completed customs clearance at Lang Son’s border gates — the highest single-day figure ever recorded in the province. Of these, 634 carried exports and 1,371 imports.
The OECD Economic Surveys: Vietnam 2025 report focuses on analysing the country’s macroeconomic fundamentals, the impact of international integration on attracting foreign investment and trade, and the country’s prospects for developing a low-carbon economy.
Antoine Colin, Senior Vice President for Global Supply Chain Digital Transformation & Resilience at HP Inc., affirmed HP’s strategic commitment to building a supply chain and ecosystem in Vietnam and the region.
Deputy Director General of the Ministry of Industry and Trade (MoIT)’s Trade Promotion Agency Bui Quang Hung emphasised that logistics has evolved from a technical function into a core capability for Vietnamese exporters to maintain their competitive advantage in the US market.
A trade official has suggested companies work closely with shipping lines, airlines, and freight forwarders to monitor routes, transit times, and potential surcharges while exploring broader cargo insurance to cover risks like war and terrorism.
In addition to institutional reform, the agency is also rolling out key solution groups to combat counterfeit goods, imitations, and intellectual property infringements in the digital environment.
The event, co-organised by the Vietnam Trade Office in the UK and TT Meridian, a local importer of Vietnamese fresh produce, aims to build a national lychee brand and encourage broader recognition of Vietnamese fruits in a competitive, high-end market.
The industry's performance has been powered by bold investments in modern production lines, enabling Vietnamese firms to produce complicated products which were exclusive to advanced economies.
Vietnam’s finance and banking sector has reduced its ratio of non-performing loans to 6.7 percent at the end of June 2018 (Photo: VietinBank) 
