The gap between what is being lent by Vietnamese banks and what is being deposited by the general population is getting wider, according to VN Express. At Vietcombank, for example, the publication notes that loans grew by 8 percent but deposits grew by just 2 percent in the first half of this year.
This could be symptomatic of a much bigger problem in that banks are being pressured to lend in order to meet a 14 percent credit growth target set at the beginning of the year which may be contributing to rising bad debts.
One analysis of 29 of Vietnam’s biggest banks earlier this year, found that 27 had recorded an increase in bad debt by the end of June. Between them there was VND 46,719 billion or US$1.86 billion in bad debts, an increase of 20.8 percent compared to the end of 2023.