Business Updates in Vietnam on April 21, 2024

Vietnam’s central bank has announced an extension of its debt restructuring policy, allowing commercial banks to maintain current debt classifications for struggling businesses for another six months, until the end of 2024. The State Bank of Vietnam (SBV) made this announcement at a press conference on April 19, emphasizing efforts to facilitate credit flow and alleviate financial pressure on businesses and banks.

The extension is provided in Circular 02/2023/TT-NHNN, permitting banks to reschedule debt repayment and keep debt classifications unchanged for debtors in difficulty. Deputy Governor Dao Minh Tu highlighted concerns in the banking sector regarding the circular’s expiration on June 30, which raised fears of increased repayment pressure on businesses and difficulties in addressing non-performing loans.

Tu cautioned that while the policy supports businesses and banks, abuse could pose a long-term threat to the national financial system by concealing bad debts. The policy will be reviewed by the end of 2024, with alternative support mechanisms explored if businesses continue to face difficulties.

Under the circular, eligible borrowers can have their loan terms restructured while maintaining debt classifications. The latest data from the SBV showed nearly 188,000 customers had their loan repayment terms restructured, with total principal and interest amounting to over VND183.5 trillion.

Despite a sluggish start to the year, credit growth rebounded in March, with a 1.34% increase against the end of 2023. Additionally, the SBV announced plans to sell U.S. dollars at VND24,450 to stabilize the exchange rate, addressing global economic and geopolitical volatility affecting the Vietnamese dong.

In other news, VinFast reported Q1 revenue of $302.6 million, driven by successful campaigns and new electric vehicle models. The company aims to deliver 100,000 electric cars in 2024, with partnerships established in various markets. The news of VinFast’s growth aligns with positive signs in various sectors, including textile, garment, petroleum, and electronics industries, indicating a promising outlook for Vietnam’s economic development.