Central bank refutes Moody’s NPL report(VOV) - The State Bank of In its report dated February 18, Moody's Investors Service maintained a negative outlook on SBV estimated
The central bank explained the ratio increased from 4.08% in late 2012 to 4.73% by October 2013, but it nosedived to 3.63% by December 2013 thanks to macroeconomic improvements and the banking system’s restructuring efforts. Commercial banks have implemented a score of measures to settle NPLs and bring the ratio under control. They restructured debt, making it easier for businesses to access loans, kept a tight grip on operational costs, and set up provisions funds to tackle NPLs. The Vietnam Asset Management Company (VAMC) was established in 2013 and had purchased VND38.9 trillion worth of NPLs from credit organisations by December 31, 2013. However, the central bank acknowledged the banking system comes under mounting pressure for a NPL rise, taking into account the slow recovery of industrial production and real estate transactions, and clients’ debt payment possibility. The bank’s debt restructuring decision helped businesses take out new loans at an appropriate interest rate, but it incurs a high risk of increasing NPLs unless macro-economic conditions for business production improve. SBV confirmed it is a common occurrence that different financial institutions on occasion come up with different data derived under their own criteria, but said its data is reliable and legal as it is based on verified information and calculated on the current law. VOV |
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