Non-performing loans ratio stays high in HCM City
There were US$2.183 billion, worth of non-performing loans (NPLs) in Ho Chi Minh City at the end of March, accounting for 4.85 percent of the city's total loans.
The online Sai Gon Economic Times reported that the number of potentially irrecoverable debts, or Group 5 debts, remained high, representing 73.02 percent of the city's total NPLs, a slight decrease from 75.7% at the end of 2013.
According to the central bank's HCM City branch, the city's lending in the first quarter this year rose very slowly, by just 0.57 percent, from the end of last year US$45.428 billion.
Deputy Director of the central bank's HCM City branch Nguyen Hong Minh attributed the slow lending increase in first quarter of this year to a weak demand of the economy.
Credit institutions too hesitated to lend as NPLs remained significantly high, Minh added.
Minh said that the credit growth in Q1 was mainly thanks to a rise in foreign currency lending, especially in January. Domestic importers borrowed large sums of foreign currencies in Q1 to import goods to meet the rising demand during the Lunar New Year holiday.
By the end of February, the outstanding loans in Vietnamese dong amounted to VND 37.651 billion, down 1.38% from the end of 2013.
The outstanding loans in foreign currencies maintained steady growth in the first two months and reached US$7.41 million, up 2.96% from the end of 2013.
In the first quarter, firms in the prioritized industries of agriculture and rural development, export, small- and medium-sized enterprises, supporting industries and high-tech applications borrowed US$6.33 billion, up nearly 5.4% against the end of last year. The preferential interest rates for the firms were under 9% yearly.