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Bad debt of Vietnam’s whole economy at 7-8pct: Bidv’s chairman

Till the end of July, the bad debts of the whole banking system against the total outstanding loans for the economy were 3.04%, higher than 2.16% in the end of 2010, according to the official statistics from the State Bank of Vietnam (SBV).

However, Tran Bac Ha, chairman of Bank for Investment and Development of Vietnam (Bidv), said that the bad debts of the whole economy were estimated at 7-8%.

Particularly, Bidv’s current bad debts are 2.59%, increasing against the figure in early this year, and it is estimated to be maintained at 3-4% by the end of this year, Ha said.

According to the representative of state-run enterprises, the bad debts of some banks are still higher than the average level of the entire banking system, of which, Vietnam Bank for Agriculture and Rural Development (Agribank)’s bad debt is 6.67% and Vietnam Commercial Joint Stock Bank for Foreign Trade (Vietcombank-VCB)’s bad debt is 3.47%. Notably, Agribank still posted low capital adequacy ratio (CAR).

Chairman of Agribank, Nguyen Ngoc Bao, attributed the increasing bade debts to lending activities for real estate sector.

But notably, the bad debt of banks is increasing in the context of Vietnam’s credibility at low.

According to Ha, in 2008-2009 period, the government had issued policies on finance structure and debt structure for enterprises that faced difficulties directly caused by the global economic crisis. Therefore, this moment is also necessary time to propose the government for similar policies.

From VietNamBusiness

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