Hong Phuc
Customers transact with a local bank in HCMC in this file photo. Banks' consolidated earnings results in the first half of the year show an increase of bad debts - Photo: Minh Khue
Asia Commercial Bank (ACB) set aside VND354 billion for its risk provision fund, six times higher than last year’s same period.
ACB’s high risk provisions resulted from mounting bad debts. On June 30, 2014, its bad debt ratio went up from 3% in late 2013 to 3.6%, equivalent to VND4.037 trillion.
With such bad debt, potentially irrecoverable debts (group 5) totaled VND2.616 trillion, up over 23% against last year and accounting for 64.8% of total bad debts, while debts needing special attention (group 2) picked up 22%.
At Saigon Thuong Tin Bank (Sacombank), bad debts recorded on June 30 accounted for 1.5% of total outstanding loans, up a slight 1.48% from last year. However, its January-June risk provisions inched up nearly 25% year-on-year to VND308 billion.
Meanwhile, the Bank for Foreign Trade of Vietnam (Vietcombank) reported total bad debts of over VND9 trillion, equivalent to 3.09% of its total outstanding loans. Of this, potentially irrecoverable debts made up VND4.765 trillion, up 70.7% year-on-year and 2.73% against last year. With such bad debt ratio, Vietcombank would have to sell bad debts to Vietnam Asset Management Company (VAMC) in the coming time.
Bad debts at the Vietnam Bank for Industry and Trade (VietinBank) were put at VND9.575 trillion on June 30, 2.4 times higher than late last year. Besides, its risk provisions also climbed strongly by over 30%.
This surprised the market as a long period of time before 2014, VietinBank’s bad debts accounted for only 1% of outstanding loans and the bank’s leaders appeared to be confident about the quality of banking services.
Early this year, after VietinBank’s shareholders approved a leadership reshuffle, including the posts of board chairman and general director, statistics of the bank turned out to be less glossy, which demonstrated the new leadership wanted to make the actual health of the bank known.
Bad debts at Military Bank (MB) in June reached VND2.915 trillion, up nearly VND770 billion and accounting for 3.1% of total outstanding loans. Late last year, its bad debt ratio stayed at only 2.46%.
In addition, MB’s risk provision fund rose by nearly 18% in January-June, which means its bad debts would have to be sold to VAMC.
Statistics at Vietnam Export-Import Bank (Eximbank) were also not as good as expected as it had VND2.364 trillion bad debts. This bad debt amount represented 2.94% if its total outstanding loans, close to the level set by the central bank to force banks to sell bad debts. Banks with the bad debt ratio of 3% or above are compelled to sell debts to VAMC.
Eximbank’s risk provisions increased by a staggering 88% in the first half of the year. The bank saw its bad debt ratio at around 2% with VND1.652 trillion late last year.
According to analysts, banks’ revelations of their actual earnings results are a good sign. This indicates banks are more transparent to their shareholders.
In a broader perspective, the central bank has recently taken measures forcing banks to be more transparent. However, some said this is just part of a story.
Banks seem to have delayed releasing their earnings reports. It took them 45 days after quarter two to announce their reports but those reports have not been publicized. Just one-third of the banks have released their reports.
Đăng ký: VietNam News
