VINACHEM

Despite system-wide increase, 21 banks keep bad debt ratios below 3%.

As of June 30, 2025, total bad debt at 29 commercial banks reached 294.39 trillion VND (approximately $11.9 billion), up more than 13% compared to December 31, 2024. The rise underscores the growing pressure on Vietnam’s banking sector, despite differing performances across institutions.

According to Q2 financial statements, total outstanding loans at these banks stood at 14.77 quadrillion VND ($596 billion). Alongside rising bad debt, banks have had to significantly increase credit risk provisions. In the first half of 2025, total provisions reached 86.06 trillion VND ($3.47 billion), up 10% year-on-year.

Mixed picture in non-performing loans

At the end of Q1, only seven banks had improved bad debt ratios compared with late 2024. By Q2, that number rose to 11. Some banks made remarkable progress in reducing their non-performing loans:

NCB cut its bad debt ratio from 19.54% to 11.35%
ABBank from 3.74% to 2.75%
Viet A Bank from 1.37% to 1.11%
Agribank from 1.68% to 1.43%
SHB from 2.9% to 2.56%
TPBank from 2.15% to 2.05%

However, other banks saw significant increases:

PGBank’s ratio rose 0.76 percentage points
BVBank up 0.74 points
BIDV up 0.57 points
HDBank up 0.56 points
Saigonbank up 0.55 points
Nam A Bank up 0.52 points

By loan category, substandard debt (Group 3) jumped 32%, doubtful debt (Group 4) rose 17%, while potentially irrecoverable debt (Group 5) increased 7% compared with late 2024.

NCB remains at the top, but improving

Despite having the highest bad debt ratio in the system (11.35%), NCB has made notable progress, cutting nearly 8.2 percentage points from last year. Along with ABBank and Viet A Bank, it is one of the few institutions to improve across all debt groups, reflecting strong efforts to restructure and manage credit risk.

The safe threshold for bad debt ratios is considered below 3%. As of June 30, 2025, 21 out of 29 banks maintained ratios under this benchmark. Twelve banks recorded rates below 2%, including Vietcombank (1%), Viet A Bank (1.11%), Bac A Bank (1.25%), ACB (1.28%), VietinBank (1.31%), Techcombank (1.32%), Agribank (1.43%), MB (1.6%), LPBank (1.74%), SeABank (1.95%), KienLong Bank (1.96%), and BIDV (1.98%).

Although system-wide bad debt rose in the first half of 2025, many analysts expect improvement in the second half following the National Assembly’s approval of amendments to the Law on Credit Institutions. A key provision codifies Resolution 42 on bad debt settlement, providing banks with stronger legal tools to recover overdue loans.  – Source: VNN