High non-performing loan ratios are continuing to cause expenses for banks as they are forced to invest in provisions. Larger banks particularly are finding it difficult to both battle bad debt and achieve profits.
While deposit rates remain fixed, the bank lending rate could fall further due to the banking capital surplus.
Seokhee Won will join Masan as CEO of Masan Consumer Corporation and deputy CEO of Masan Group in early 2014.
With Vietnam’s January indicators maintained steady improvement, ANZ research department keeps Vietnam GDP growth forecast of 5.6 per cent this year.
While the State Bank and commercial banks have attempted to tackle non-performing loans, the risk of bad debts increasing in the future remains.
Instead of offering cheap loans to all potential clients to simulate credit growth as had been done in 2012, commercial banks towards the end of this year are instead targeting clients with specific credit packages.
Prime Minister Nguyen Tan Dung has required the State Bank to continue stabilise the dong’s exchange rate in 2014.
Banks are being questioned over the quality of the credit checks after it was revealed that the Truong Ngan Company owed debts to seven different banks while using the same collateral.
Forum’s banking group reviews bad debts
Many commercial banks might not hit their annual profit targets for the second year running due to low credit growth and the prevailing high levels of non-performing loans.
Southern Bank’s third quarter profits fell sharply on the back of losses sustained by several areas of its operations.
A looming rush to achieve the annual credit growth plan might dig Vietnam even deeper into its bad debt hole and oversupply the market with capital.
Tan Tao Investment and Industry Corporation - ITA is struggling with its credit commitments, with $85 million owed to 10 credit institutions.
If approved by the Ho Chi Minh City Stock Exchange, BIDV may list in the first quarter of 2014 under the trading code BID, noted a report from the Ho Chi Minh Securities Corporation.
Credit growth has slowed since August this year, despite efforts by banks to reduce lending rates to stimulate demand.