The State Bank of Vietnam headquarter building in Hanoi. (Source: VNA)Hanoi (VNS/VNA) - The StateBank of Vietnam (SBV) has taken steps to tighten regulations over banks’ use ofshort-term deposits, reducing its ratio used to finance medium and long termloans from 60 percent now to 40 percent by September next year.
By the end of September 2021, banks areexpected to cut it to 37 percent. From October 2021 to September 2020, theratio must be reduced to 34 percent and from October 1, 2020 onward, it will becut to maximum 30 percent.
The central bank’s policy aims to reducerisk, tighten control and to channel capital into priority sectors and small-and medium-sized enterprises, according to the SBV.
In a recent development, the latest quarterreports from several commercial banks cited by cafef.vn have shown positiveearnings but also an increase in the number of non-performing loans (NPLs)compared to the same period last year.
By the end of September, 23 banks reportedan alarming trend of NPLs rising. Notably, ABBank said its proportion of NPLsin total asset value increased by 79 percent, compared to the level at January1, 2019, attaining 1.7 trillion VND (73 million USD). Its NPLs' share in totaloutstanding loans increases from 1.89 percent from the beginning of the year to3.39 percent.
Reports from other banks also showed a 39 percentincrease for SHB at 7.2 trillion VND, a 32 percent increase for Techcombank at 3.7trillion VND and 30 percent increase for MBBank at 3.7 trillion VND.
The big four banks (Agribank, BIDV,Vietcombank and VietinBank) also reported similar findings with Vietcombank’sNPLs totalling 7.6 trillion VND and BIDV 22.4 trillion VND.
The SBV put total bad loans of 23 banksacross the country at 94 trillion VND (4.05 billion USD), up 16 percent sincethe beginning of the year. NPLs have been on the rise even for banks withmodest or no credit growth since the end of last year.
Notably, potentially irrecoverable debtaccording to the SBV’s standards has risen fast, with ABBank reporting morethan 1trillion VND, Vietcombank 4.9 trillion VND and BIDV 12.2 trillion VND./.
VNA
