Non-performing loans (NPL) at local commercial banks in the first half of this year made up 2.52 per cent of their total outstanding loans, up from 2.17 per cent at the end of 2008 after loans for stock and realty investments grew sharply, the Financial Investment newspaper said Monday.
Between May and June, local banks had significantly boosted loans for stock investments, sending total loans for the sector up by 28.31 per cent since the end of 2008, much higher than the figure of VND7.157 trillion at the end of April, up only 4 per cent from the end of 2008, the SBV said.
Local banks also increased lending for the realty sector from April to May, pushing total loans for the sector by 10.48 per cent by the end of June, much higher than the figure of VND148.451 trillion by the end of April, down 12 per cent from the end of 2008, the SBV emphasized.
“NPL could rise to 5 per cent of the total outstanding loans by local banks, which will be still at secure levels,” Le Xuan Nghia vice chairman of the National Committee for Finance Supervision, a think tank of the government’s monetary policies, said.
Nghia urged local banks to pay attention to loan risk management, particularly risks from consumer lending and medium-term lending activities, which could shift to stock and realty investments to lead to higher levels of NPL.
Many analysts said that current levels of loans for stock and realty sectors are at secure levels allowed by the SBV.
Recently, The Global Rating Agency Fitch announced ratings of six local banks based on the NPL of respective rates of 10 per cent, 15 per cent and 20 per cent. Fitch rated performances of Vietcombank, ACB and Sacombank at level D and ranked Agribank, BIDV and Vietinbank at D/E, meaning that those local banks all can settle their debts.
The SBV has requested that Vietinbank and Vietcombank cap their credit growth at 25 per cent as part of its efforts to restrict credit growth of the entire economy at 25 per cent to 27 per cent and total payment balances at 25 per cent in order to tame inflation at single-digit levels.
This year Vietnam aims for GDP growth of 5 per cent. (Financial Investment, SBV)
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