As of December 31, 2024, Group-5 bad debts of 25 listed commercial banks had reached VND118.915 trillion ($4.75 billion), an increase of 39.3 percent over the beginning of the year. 

The figure did not include the Group-5 bad debts at LPBank and VIBBank, because the two banks only reported total NPLs, not detailed information about each group of bad debt.

The reports of most commercial banks which have released their financial reports showed that Group-5 NPLs accounted for the largest proportion. At some banks, Group-5 NPLs accounted for over 90 percent of total NPLs (Group 3-5 bad debts).

Techcombank and ABBank saw the Group-5 NPL ratios increasing considerably, by 136.9 and 103 percent, respectively, compared with the beginning of 2024.

Techcombank revealed the VND3.269 trillion worth of Group-5 bad debts (0.54 percent of total outstanding loans), an increase of 137 percent over the beginning 2024. Its short-term debts accounted for 34.95 percent of total outstanding loans, while medium- and long-term were 14.07 and 50.98 percent, respectively.

The loans provided to fund real estate business accounted for the largest proportion at the bank, or 30.88 percent of total outstanding loans (it was 35.21 percent in 2023).

Meanwhile, ABBank’s Group-5 bad debts increased by 103 percent and accounted for 57 percent of total bad debts of the bank.

The other commercial banks with significant Group-5 bad debt increases include Saigonbank (72.41 percent), BacA Bank (73.4 percent), ACB (74 percent), Sacombank (81.36 percent) and KLB (82 percent).

SHB, NCB and TPBank caught attention from the public as their financial reports showed decreases in Group-5 bad debts.

SHB Group-5 bad debts dropped by 3.67 percent to VND9.704 trillion, NCB 3.49 percent to VND13.665 trillion and TPBank 0.28 percent to VND1.115 trillion.

In the case of NCB, the significant reduction in bad debts in general and Group-5 bad debts in particular is a positive indicator, reflecting the bank's achievements in its restructuring process implemented in accordance with the plan on restructuring credit institutions in association with bad debt settlement in 2021-2025 as outlined by the PM’s Decision 689/QĐ-TTg and the State Bank of Vietnam's guidance.

The banks with the lowest increases in Group 5 loans include VietABank (3 percent), VietBank (5.2 percent), PGBank, and SeABank (both increased by 25 percent), and BVBank (29 percent).

The state-owned banks, including Vietcombank, BIDV, and VietinBank, which are the biggest lenders, had the highest NPLs, but they were not among the banks with the sharpest increases in Group-5 bad debts.

The increases were 30 percent at Vietcombank, 49 percent at VietinBank and 55 percent for BIDV.

To control bad debts, the central bank has suggested several measures. For credit institutions, thorough borrowers’ debt payment capability assessments are required to prevent new bad debts. 

For existing bad debts, drastic measures need to be taken to urge clients to pay debts, accelerate the debt recovery and mortgaged asset foreclosure. The central bank has also laid down a legal framework to regulate debt trading companies, thus paving the way for bad debt transactions.

Twenty six commercial banks have publicized the results of their capital mobilization in 2024, with VND12.846 quadrillion mobilized, up 12.89 percent over 2023.

The ‘big four’ (state owned banks, including BIDV, Vietcombank, VietinBank and Agribank) continued leading the banking system in deposits. There was no other bank mobilizing VND1 quadrillion last year.

Agribank led in deposit value, with deposits exceeding the VND2 quadrillion level for the first time, up 10 percent over 2023.

BIDV ranked second with VND1.929 quadrillion worth of deposits, up 14.47 percent. The third position belonged to VietinBank with VND1.603 quadrillion, up 13.75 percent, while Vietcombank’s figures were VND1.515 quadrillion and 8.13 percent, respectively.

The big four hold 56 percent of the capital mobilization market among the 26 banks which announced their business results in 2024.

Tuan Nguyen