Trang Chủ
“Bad debt accumulated over the years… will be brought back to the safety level right in this term of office,” Binh told the question and answer session of the National Assembly (NA) Standing Committee on Tuesday.
He added the safety threshold for bad debt is below 3% under international standards.
However, whether the fight against bad debt reaps success or not depends on many internal and external forces as well as efforts of the entire political system at home.
This was Binh’s response to the question posed by NA chairman Nguyen Sinh Hung regarding how long it would take for the central bank to lower the bad debt ratio and whether it could be reduced from now to mid-2013.
However, NA deputies were not convinced by such an answer. NA vice chairwoman Nguyen Thi Kim Ngan said: “Many deputies are still uncertain about some details in the governor’s responses, especially to the question posed by the NA chairman.”
Binh said bad debt had built up over the years. Since 2008, the bad debt ratio has been rising rapidly, by 7.4% in 2008, 57% in 2009, 41% in 2010 and 64% in 2011.
In the first six months of 2012, bad debt picked up 47% while credits inched up a mere 1%.
NA Financial and Budgetary Committee chairman Phung Quoc Hien cited SBV data saying that bad debt had reached 8.6%, equivalent to VND202 trillion, twice as much as reported by credit institutions. He asked if this could be considered dishonesty and lack of transparency.
Binh said: “I’ve been working in the banking system for 30 years. Over the last 30 years, there have always been two figures.” One figure is given by credit institutions under the regulations of the central bank, while another figure comes from the central bank through an assessment of bad debt at commercial banks.
Regarding the bad debt ratio of 13% recently issued by Fitch Ratings, the governor said this credit rating agency had explained this result was the average of the general bad debt ratio and the ratio of the banks in group two.
Binh said some credit institutions had bad debt ratios of over 30%, with certain cases above 60%.
However, he described the current bad debt ratio of Vietnam as not much critical. During the period of crisis from 1998 to 2000, Thailand used to have a ratio of 47%, South Korea 47% and Indonesia 50%, much higher than Vietnam, he reasoned.
The governor said banks had extracted VND70 trillion for risk provision. Some 84% of the bad debt is secured by assets worth 135% of the debt. According to a report SBV sent to the NA Standing Committee, as of end-March 2012, bad debt at banks amounted to over VND202 trillion, 8.6% of the total outstanding loans.
