Nguyen Quoc Hung, General Secretary of the Vietnam Banking Association, has raised concerns about the speed at which bad debt is rising in Vietnam, Tuoi Tre is reporting. Total bad debt stood at VND 1,030 trillion (US$41.18 billion) at the end of 2024, rising by VND 34 trillion (US$1.36 billion), or about 3.3 percent, in the first two months of 2025.
Key points in the article include:
- Delays in asset liquidation and judicial proceedings are raising costs for banks and eroding borrower equity.
- Banks are urging lawmakers to institutionalise Resolution 42 powers in the revised Law on Credit Institutions.
For clarity, Resolution No. 42/2017/QH14 was enacted by Vietnam’s National Assembly in 2017 and was a pivotal legal framework designed to enhance the management and resolution of non-performing loans (NPLs) within the banking sector. This resolution introduced several key mechanisms to expedite the handling of bad debts, most notably the right to seize collateral. This resolution, however, expired at the end of 2024.
See also: Banking in Vietnam: Industry Overview