loans to large state-owned borrower

by lynk2510 April 10th 2011, 8:16 pm

nesses, unless they are of strategic importance for the security of the country, cannot survive without government budget infusions, then they should fold up.

Paradoxically, this is also the time donor countries should consider reducing their help, albeit gradually, so that the government would be forced to make tough choices about their budget and to make sure Vietnam live within its means. With the present state of finances, Vietnam’s growth story is unsustainable and could unravel.

Vietnam's banking system faces turbulent conditions

Reuters 14 March 2011

Rising inflation, if not managed properly, may become the fly in the ointment for Vietnam's banks. Recent inflationary pressures, in conjunction with several years of high loan growth and rising borrowing costs, are threatening to undermine the credit quality of the country's banking industry. Although the banks were shielded from the banking crisis in advanced economies, Standard & Poor's Ratings Services believes that a combination of these three factors might result in a rapid deterioration in asset quality, if not properly managed. As mentioned in our reports on the three Vietnamese banks we rate-- Bank for Foreign Trade of Vietnam (Vietcombank; BB-/Negative/B), Bank for Investment and Development of Vietnam (BIDV; BB-/Negative/B), Vietnam Technological And Commercial Joint Stock Bank (BB-/Negative/B)--our ratings have factored in these and other heightened credit risks that could hurt asset quality.

Growing bank credit has increased the system's risks. We believe Vietnam's government is likely to lower the target for bank credit growth to 20% in 2011. In our opinion, however, the target is still too high, given our estimate of the country's bank credit to GDP of 120% as at Dec. 31, 2010, and the rudimentary nature of credit risk management systems and the country's still-evolving regulatory framework. Bank credit already grew about 28% in 2010, exceeding the government's target of 25%. In addition, Vietnam had several years of high credit growth, especially in 2007 and 2009, including loans to large state-owned borrowers,
Lowrance marine GPS
Marijuana Doctors