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Banks still have VND43,500bil worth of bad debts
The bad debts of Vietnam’s banking system had reached VND43,500bil by the end of 2008. The information was released at the banking conference held in Hanoi on December 31.
The State Bank of Vietnam on December 31 said that all commercial banks have made provisions for bad debts.
Regarding the operations of commercial banks, the central bank said that no bank had reported losses for 2008, while main indicators showed that the banking system had been operating safely with satisfactory business results.
By the end of 2008, the stockholder equity of the whole banking system had increased by 30% in comparison with the end of 2007, while the capital adequacy ratio had increased from 8.9% to 9.7%.
In 2009, the State Bank of Vietnam will maintain strict control over credit quality and aim to obtain a credit growth rate suitable to inflation control.
Commercial banks will focus on providing capital for effective projects in the fields of production and export, agriculture and rural development, while expanding loans for small- and medium-size enterprises.
In 2008, according to the State Bank of Vietnam, credit provided for the private economic sector increased by 35-37%. The same increase was seen in the loans to fund exports, while the increase of 34-36% was seen in production. Meanwhile, the capital going to agriculture and rural development increased by 30% and to poor households by 40-42%. The lowest credit growth rate belonged to state-owned enterprises, with just 12-14%.
In related news, by the end of 2008, the ratio of payment in cash had decreased to 14% of total payment instruments from 18% at the end of 2007, also according to the State Bank of Vietnam.
The strong development of non-cash payment has been cited as the main reason for the reduction in the cash payment ratio.
Since November 2008, the interbank payment system (second phase) has been in operation with the capacity of 2mil transactions a day. This has helped improve payment quality and supported the capital turnover of the national economy.
The online payment interbank system now comprises 443 units from 83 member banks.
Vietnam now has some 15mil personal accounts, which represents an increase of 36% over the end of 2007. Some 13.4mil cards have been issued, an increase of 46%. There are over 7,000 ATMs nationwide, up by 2,200. The two biggest card alliances are Banknetvn and Smartlink, which have connected with each other, and now claim 65% of ATMs.
TBKTVN, VNE
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