SBV’s HCM City Branch Suggests Setting Up Bad Debt Trading Companies

The municipal State Bank of Vietnam (SBV) in HCM City proposed the government to set up specialised companies to trade bad debts; a move aims to solve the problems of rising bad debts at local commercial banks, the local newswire VnExpress.net reported.

Bad debts at banks in the area, as of late April this year, climbed to 5.3 percent of total outstanding credits, versus 4.3 percent in late 2011.

Total outstanding loans in HCM City, as at end-April, were estimated at VND760 trillion, up 0.74 percent on month and soaring 2.27 percent on year.

Yet, credit growth of HCM City-based credit institutions in the first four months of the year slid 0.64 percent from late last year, local media quoted Nguyen Hoang Minh, deputy director of the municipal central bank, as saying. [Meanwhile, total deposits of HCM City-based banks were estimated at VND898 trillion in Apr, up 0.52 percent.]

Bank lending in the area can only expand by around 10 percent in 2012, Minh added.

 

Category: Finance