According to statistics from the financial statements for the second quarter of 2022 of 29 banks, the average bad debt ratio by the end of June 2022 increased by 0.3 percentage points compared to the end of the previous year, to 2,21%.
In particular, NCB’s bad debt ratio suddenly skyrocketed from 3% at the end of 2021 to 11.05%. The reason behind this is that in the first half of 2022, this bank's bad debt item increased nearly 4 times, from VND 1,249 billion to VND 4,900 billion, of which group 4 debt (doubtful debt) increased nearly 15 times and group 5 debt (potential loss) increased 2.4 times.
Coming out second is VPBank with a bad debt ratio of 5.25%. However, this is the bad debt ratio according to the consolidated financial statements, which includes both the parent bank and its subsidiary, FE Credit. If considered at the parent bank alone, the bad debt ratio is only 2.83% with a bad debt balance of more than VND 8,900 billion.
Following VPBank, Vietbank and Bao Viet Bank are the two banks with the third and fourth highest bad debt ratio with 3.91% and 3.63% respectively.
Other banks in the top 10 banks with the highest bad debt ratio by the end of June 2022 include Ban Viet Bank, PG Bank, SHB, VIB, ABBank and Agribank with the same bad debt ratio of above 2%.
On the other hand, Techcombank is the bank with the lowest bad debt ratio among the surveyed banks. Its bad debt ratio at the end of the second quarter was at 0.6% with a bad debt coverage ratio of 171.6%. Outstanding debt restructuring under the program to support customers affected by COVID-19 is VND 500 billion, equivalent to 0.1% of total outstanding loans, down from VND 1,600 billion as of March 31, 2021.
In addition, Vietcombank, Bac A Bank, ACB and TPBank also have relatively low bad debt ratio, which stood at below 1%.
The report of SSI Securities JSC said that the bad debt ratio of most banks deteriorated in the first quarter of the year partly due to the reclassification of restructuring debts into group 4 or 5 debt after the end of the restructuring period. These restructuring debts are likely to continue to increase when Circular 14 expires (June 30, 2022).
Besides, the high credit growth rate in recent years is also one of the reasons for the increase in bad debt balance. As of June 30, 2022, credit of the whole economy increased by 9.35%, reaching over VND 11.4 million billion, while in the same period in 2021 it increased by only 6.47%.
At the same time, more than VND 709,000 billion of outstanding debt has been restructured by credit institutions, keeping the debt group unchanged.
Compiled by VietnamCredit