Banks are scaling up efforts to address
credit quality and drive down bad debt rates.
Firms’
dismal production and business results in 2012, which could undermine their
debt repayment capacity, is banks’ biggest concern.
An ACB
representative said the bank had exerted energy into analysing the root of the
problem and rendered warnings about bad debt threats.
This
year, ACB will focus on promoting lending in retail and medium-sized
enterprises and individual customer groups. Besides, the bank will foster
credit sources’ risk management aiming at minimising bad debt rates.
Particularly, it will strive to keep the debt rate of group 3 to 5 loans at
less than 1 per cent and that group 2 at 2 per cent of total outstanding loans,
according to ACB.
In
2011, Vietcombank’s bad debt rate was kept at 2.03 per cent, lower than 2.3 per
cent projected which was approved by the annual shareholder meeting.
This
year, Vietcombank set to retain bad debts of less than 2.8 per cent and step up
efforts to boost debt recovering efficiency.
“In
2012, our bank will tightly control medium and long-term credit and growth in
foreign currency reserve as well as keep close eyes on central bank’s
management policies and the system’s liquidity to be able to draw suitable
policies aimed at restricting bad debts,” said Vietcombank general director
Nguyen Phuoc Thanh.
As with
DongA Bank, the bank saw VND742 billion ($35.3 million) in bad debts (from
group 3 to group 5 loans) in 2011, tantamount to 1.69 per cent of its total
outstanding loan, but it was still higher than 1.4 per cent in 2010. The bank
also contributed VND296 billion ($14.1 million) for loan loss provision, said
general director Tran Phuong Binh.
This
year, Dong A Bank will strive to keep bad debts of 1.5 per cent of total
outstanding loans and set aside 2-3 per cent of its assigned 15 per cent credit
growth in 2012 to make provisions.
In
2012, the State Bank continues its tightening credit policies to tame inflation
and ensure macroeconomic stability. Ceiling credit growth targets were set at
17, 15, 8 and zero per cent depending on bank health. Lending to non-priority
areas was kept at less than 16 per cent of total outstanding loans. However,
according to HSBC Vietnam, banks could hardly surpass those set credit growth
targets on the back of current very low market demands.
Thuy
Vinh | vir.com.vn
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