{
  "id": 3923112,
  "title": "Bad debt growth at listed banks slows but asset quality risks persist",
  "url": "https://urgent.news/2026/08/28/bad-debt-growth-at-listed-banks-slows-but-asset-quality-risks-persist",
  "topic": "business",
  "section": "Business",
  "published": "2026-08-28T08:10:02.000Z",
  "source": {
    "name": "Vietnam Investment Review",
    "slug": "vietnam-investment-review",
    "url": "https://vir.com.vn/bad-debt-growth-at-listed-banks-slows-but-asset-quality-risks-persist-159506.html"
  },
  "original_language": "en",
  "account": "By the close of the second quarter in 2026, the total loans categorized as Group 5, which signify a potential for loss, within 27 listed banks amounted to $6.99 billion, reflecting a 3.7% increase from the conclusion of 2025. This growth in Group 5 loans was notably slower than the 17.5% surge observed in total non-performing loans (NPLs). Nevertheless, Group 5 loans continued to represent a substantial 56% of overall NPLs, while Group 2 loans, those requiring closer monitoring, and off-balance-sheet debt also experienced incremental growth, suggesting that asset quality concerns remain prevalent.\n\nNotably, 11 banks within the monitored group managed to reduce their Group 5 loans compared to the end of 2025. The most significant decrease was observed at VietBank, which slashed its Group 5 loans by 48.5% to $44.3 million, followed by Saigonbank with a 31.3% reduction to $13.4 million. VietinBank, representing the large-bank segment, also saw a notable 21.3% decline in Group 5 loans, down to $624.4 million. Several banks experienced reductions of less than 10%, including VIB (-9.7%) and Eximbank (-8.8%), bringing their balances to $229.7 million and $126.9 million, respectively.\n\nSeveral banks, such as PGBank and Vietcombank, recorded modest declines of 4.2%, bringing their balances to $23.5 million and $333 million, respectively. The improvements at Techcombank and ABBank were relatively minor, with their Group 5 loans decreasing by 0.9% and 0.1%, respectively, to $235.4 million and $22.7 million. The resolution of Group 5 loans also played a significant role in enhancing loan quality, most prominently evidenced by VietBank's total Group 3-5 NPLs decreasing by 27% to $89.6 million at the end of Q2.\n\nThe composition of NPLs varied among institutions, with VPBank standing out for its relatively low concentration of Group 5 loans at 25.7% of total NPLs. The decline in Group 5 loans at certain banks may have stemmed from debt recovery, the sale of collateral, or the utilization of loan-loss provisions for debt write-offs. However, these reductions do not conclusively eliminate risk, as some debts might be relocated off the balance sheet following the application of provisions. According to Rong Viet Securities, system-wide on-balance-sheet NPLs reached approximately $12.4 billion at the end of Q2 2026, a 6% increase from Q1. This rise was accompanied by a surge in Group 2 loans to over $8.48 billion, raising the Group 2 loan ratio from 1.23% in Q1 to 1.37% at the end of Q2. The continued high level of net NPL formation in Q2 is attributed to relatively rapid increases in lending rates. VDSC emphasized that the growth in Group 2 loans could serve as an early indicator of NPLs in the subsequent one to two quarters, given that most banks have yet to substantially bolster their provisioning buffers.",
  "summary": "Bad debt growth at listed banks slowed in the first half of 2026 but rising volume of loans needing attention and persistent irrecoverable debt signal mounting asset quality risks",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}