The State Audit Office of Vietnam (SAV) has recently published an audit plan to audit the accounts of 20 state-own and joint-stock commercial banks for their performance in resolving bad debts.
Accordingly, Vietinbank, BIDV, and Vietnam Asset Management Company (VAMC) will be audited. The 18 other joint-stock commercial banks are ABBank, ACB, BacABank, CBBank, Eximbank, GPBank, HDBank, NamABank, OCB, Sacombank, SeABank, SHB, Techcombank, VietCapitalBank, VIB, VietABank, VietBank, and VPBank.
By auditing specific dossiers, the SAV will clarify what difficulties the banks are facing in resolving bad debts (non-performing loan). As for VAMC, the authority will also assess the trading and resolution of non-performing loan and securities purchased from commercial banks. Hoang Van reports on Vietnam Investment Review.
Previously, a report of the State Bank of Vietnam’s (SBV) Supervision Department stated that credit organizations solved a total of $6 billion of bad debts between August 15, 2017 and June 30, 2018. This includes $3 billion in their internal balance sheet, $934.8 million on their external balance sheet, and $2 billion of debts sold to VAMC in the form of special bonds.
Besides, local credit organizations utilized $2.65 billion in provision to deal with the non-performing loan on their internal balance sheets.
Financial reports from the last fourth quarters showed that the volume of non-performing loan has fallen significantly against early last year, with the decrease reaching even 50 per cent at some banks.
According to the available financial reports of the commercial banks, which will be audited, the total non-performing loan in 2018 was more than $1.51 billion, down 17 per cent on-year.
On the other hand, a large number of banks have yet to get ahead with their bad debts, leading to high provisions for risk. For instance, as of the end of 2018, VPBank’s bad debts stood at $337.7 million, down $69.6 million against late last September 2018, but up 25 per cent against early last year. Agribank and Vietinbank are similar cases.
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