Bad debts accounted for 3% of the total VND245 trillion outstanding loans for property at the end of June, Le Xuan Nghia, vice chairman of the National Financial Supervisory Committee said at a meeting today.
Worse still, loss loans ( loans are considered uncollectible) comprised of up to 40% of the bad debts, local news service NDHMoney quoted Nghia as saying at the workshop on “ impacts of property market on Vietnam financial market, policy recommendations” held this morning, August 18.
Nghia said property loans comprised of 10% of Vietnam’s total outstanding loans, focusing on two big cities Ho Chi Minh and Hanoi with corresponding figure of 45% and 18% of the total loans for property.
Of note, registered FDI into property sector plunged to $305 million in H1/2011 from $6.84 billion in 2010 and $26.6 billion in 2008.
In reverse, remittance into property rose. A survey into 4,000 remittance receivers showed that 52% cases were to invest in property, the rest to deposit and consumption.
Nghia pointed out that small banks in Vietnam suffered the most from property loan risks as some have property outstanding loan ratio of up to 40%.
Property loans is closely related to banks’ major shareholders and “ lending to insiders is the biggest risks” Nghia concluded.
Stoxplus.com
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