Total bad debt is swelling, banks are making strong provisions for risks

(Dan Tri) - The increase in provisions took place in the context of bad debt in the whole industry increasing by 19% to more than VND274,000 billion, reflecting the trend of proactively strengthening the safety "buffer" against credit pressure.

In the context of increasing competition, banks have both implemented a series of preferential loan packages under new policies and increased credit risk provisions.

According to statistics from the financial reports of 27 commercial banks, by the end of the third quarter, the total risk provisions for customer loans reached about VND 230,000 billion, an increase of 11% compared to the end of 2024.

The Big 4 group leads, in which BIDV set aside nearly VND 39,649 billion; VietinBank ranked second with VND 38,336 billion; Vietcombank ranked third, recording VND 34,009 billion in the past 9 months.

In the private banking sector, VPBank leads with 17,340 billion VND; followed by MB with about 13,800 billion VND. Many other banks such as Sacombank,SHB , Techcombank also set aside tens of thousands of billion VND.

In terms of increase, Sacombank recorded the strongest increase in provisions, up 75%, to more than VND15,500 billion; followed by VietABank (up 35%), Techcombank (up 31%), TPBank (up 30.5%) and PGBank (up 28%).

Sharing with Dan Tri newspaper reporter, a financial expert, who is also a major investor in the stock market, said that the competitive pressure in the banking industry is very large.

While previously the State-owned banking group dominated the market share of deposits, loans, CASA, etc., now mid-sized banks are rising strongly. According to this person, the pressure will increase at the end of the year and last until 2026.

At the same time, the increase in provisions took place in the context of bad debt in the whole industry continuing to increase, showing that banks are proactively strengthening their safety "buffer" against credit pressure.

As of the end of the third quarter, the total debt of groups 3-5 (bad debt) of 27 banks reached about VND 274,050 billion, an increase of more than 19% compared to the end of 2024 - equivalent to an increase of VND 44,004 billion in 9 months.

According to a report by Dragon Capital Securities (VDSC), this development is not yet worrying, especially when many banks proactively narrowed down risk handling activities during the period.

The results of a survey on business trends of credit institutions announced by the State Bank also show that banks forecast that the bad debt ratio will decrease significantly in the fourth quarter.

Source: https://dantri.com.vn/kinh-doanh/tong-no-xau-phinh-to-ngan-hang-manh-tay-trich-lap-du-phong-rui-ro-20251118111232281.htm