Bad debts to return to 2017 high

As of the end of September, the ratio was 1.9 percent, up from 1.69 percent at the end of last year, Le Trung Kien of the inspecting and supervising unit of the State Bank of Vietnam (SBV), said at a forum on managing bad debts Wednesday.

This is the same level as 2018 and close to the 1.99 percent reached in 2017, he said.

"It shows the devastating impact of the pandemic".

The fourth wave of Covid disrupted most economic activities and forced an average of 10,000 companies to suspend operations each month, including companies that had borrowed from banks, he added.

Nguyen Quoc Hung, general secretary of the Vietnam Banks Association, said banks have so far restructured around VND600 trillion ($26.45 billion) worth of loans.

But this is only the preliminary figure and it would rise next year because there are actually VND3,000 trillion worth of loans affected by the pandemic, he warned.

Bad debts are set to rise as companies are still facing great difficulty in keeping their business going, he added.