Vietnam’s banks are expecting a surge of bad debts when a moratorium on outstanding debt comes to an end in June of next year, Vietnam News is reporting.
Key points:
- Bad debt at the end of Q3 2023 was 196.75 trillion (US$81 billion) up 61 per cent compared to Q2;
- The bad debt ratio of the banking system hit 6.16 percent;
- 70 percent of mortgages are secured with real estate;
More details: Circular 02/2023/TT-NHNN gave banks more freedom to postpone repayments on outstanding debts back in April of 2023 but with a key caveat that these postponed debt repayments had to be cleared by June 30, 2024. A proposal has been put forward to extend the deadline to June 2025 but the State Bank of Vietnam is yet to make a decision.