Banking is one of the few industry groups that recorded an increase in profit in the first quarter of this year (up 5.9% over the same period last year), but the financial picture of this group is not entirely rosy. Credit quality of banks has deteriorated significantly after the first three months of the year when debt to pay attention (debt group 2 - overdue by 90 days) and bad debt (debt group 3-5) increased sharply. In the group of state-owned banks, the biggest increase was in debt that needs attention (group 2), substandard debt (group 3) and doubtful debt (group 4). Like Vietcombank, these three components all increased at a double-digit rate compared to the end of last year, while group 5 debt decreased slightly. The ratio of bad debts (group 3-5) to total outstanding loans increased from 0.68% at the end of last year to 0.84%. no matter what, fast mourning With BIDV and VietinBank, the trend is similar. By the end of the first quarter, BIDV's group 2 debt increased by 47%, group 3 debt more than doubled, and group 4 debt increased by more than 60%. With VietinBank, all three items increased compared to the end of last year. Each bank has its own approach to the problem of bad debt. Vietcombank continued to increase the "provision buffer" when the provisioning scale increased by nearly 30% compared to the beginning of the year, the coverage ratio was more than 300% (ie, one VND of bad debt is provisioned with 3 VND). VietinBank also increased the provision but used more than VND 7,000 billion to handle bad debts, helping to reduce the debt size of group 5 by more than 30%. With the top group of private banks, the fluctuation in the size of overdue debt is somewhat higher than that of the state sector. At VPBank, outstanding debt (group 2) and substandard debt (group 3) both doubled after the first three months of the year. On the separate financial statements of the first quarter, the debt of groups 3-5 of VPBank increased by 3.4% compared to the total outstanding loans, while in the same period last year, it was 2.8%. With Techcombank, the debt size of groups 3-5 also increased by double digits in the first quarter of this year. Meanwhile, MB in terms of ratio, the increase of overdue debt group is higher than VPBank or TCB. By the end of the first quarter, the size of MB's debt - debt delayed for payment up to 90 days - was nearly three times higher than at the beginning of the year. Group 3 debt also nearly tripled, while group 4-5 debt increased by double digits. Total debt of group 3-5 of this bank increased by nearly 70%, while credit growth in the first three months of the year reached 4.5%. Some smaller banks such as BaoVietBank, ABB, OCB also recorded debts of group 3-5 of the total outstanding balance (consolidated financial statements) exceeding 3%. Currently leading the system in terms of bad debt ratio is National Bank (NCB). According to data from the State Bank of Vietnam, the sector's on-balance sheet bad debt ratio rose to 2.91% at the end of February this year, compared with 2% at the end of last year. "Most banks recorded an increase in bad debt ratio and a decrease in bad debt coverage ratio compared to the previous quarter," wrote VNDirect's banking industry update report. Accordingly, this unit believes that difficulties from the real estate market are still a big challenge for the prospects of the banking industry when this sector accounts for 21% of the credit of the whole system. In the first annual meeting of the year, Mr. Nguyen Duc Vinh, General Director of VPBank also said that the difficult situation of the economy was reflected in the first quarter of this year when many businesses did not have orders, individual customers also affected, leading to the situation of many loans not being able to repay. In addition, the crisis of some real estate groups led to conflicts between developers and buyers about loan interest support policies, causing some to turn into bad debts. "We expect bad debt to continue to increase in the second quarter but will remain below 3% thanks to the bank's measures to support customers and debt structure policies," Vinh said and forecast in the coming quarter. In the last two quarters of this year, the situation gradually cooled down. For NCB, in addition to part of the reason from the general economy's tendency to decline, negatively affecting customers' ability to repay, the high bad debt ratio is also due to this bank's reclassification of bad debts. , overdue debt according to the debt status; especially after the circulars stipulating debt restructuring, maintaining the same debt group, and exempting and reducing loan interest from customers affected by the Covid-19 epidemic have expired. Rong Viet Securities Company (VDSC) said that after the Covid-19 period, the business has a period of recovery when the economy reopens along with domestic and international consumer demand accelerating, since then. the business is able to repay the debt. However, the current picture is more difficult when the time and extent of the global economic recovery are still unknown.