The unimproved financial situation of those three banks was highlighted in the report of The State Audit of Vietnam (SAV) on the implementation of National Assembly’s Resolution on strengthening crime prevention and fighting measures in 2017. SAV stressed that without effective measures, the losses will continue.
The report also expresses the limitations and inadequacies in the management, administration, and use of public finance and public assets of audited sites.
Earlier, many problems in the banking sector were pointed out. SAV's audit report showed that bad debt ratio of credit institutions remained high.
Accordingly, the total bad debts of the credit institution system until December 31, 2015 were VND476.86 trillion (roughly US$21 billion), accounting for 8.85 per cent of total outstanding loans. This included outstanding debts at Vietnam Asset Management Company (VAMC), restructured debts and non-performing loans.
Meanwhile, instead of actively dealing with bad debs, VAMC mainly sold its bad debts via credit institutions with the low outcome. The total debt collection from 2013 to 2015 was VND22,902 billion (roughly US$1.01 billion), accounting for only 10.4 per cent of purchased outstanding debts.
Also, the debt classification of most of the audited credit institutions was not in accordance with the regulation of the State Bank.
Many inadequacies in the lending process and procedures in audited commercial banks, the lack of strict appraisal and tight supervision of the use of loans were pointed out.
In many commercial banks, there are still loan backlogs which are difficult to recover because many bank leaders deliberately violated the laws.
