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Banks to make provisions for COVID-19 affected loans this year

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The profit growth of banks this year is forecast at about 10 per cent against 20-25 per cent in recent years mainly due to the requirement to make provisions on COVID-19 affected loans. Photo zing.vn

HÀ NỘI — Banks will have to set aside money for potentially unrecoverable COVID-19 affected loans from this year, according to an amended circular drafted by the State Bank of Việt Nam (SBV).

Last year, the central bank issued Circular 01/2020/TT-NHNN, allowing banks to avoid making the provisions in 2020 to support banks and borrowers affected by the pandemic.

According to SBV deputy governor Đào Minh Tú, the amended circular, which is expected to be issued this month, will support businesses and people with loans, creating conditions for businesses to recover quickly.

However, Tú said, the circular would also regulate provisions on COVID-19 loans to ensure the safety of credit institutions and the national financial system. The provision ratio will fit the financial strength of credit institutions.

The ratio of the provisions is drafted to gradually increase, from 30 per cent of COVID-19 affected loans by the end of 2021 to 60 per cent by the end of 2022 and 100 per cent by the end of 2023.

According to Cấn Văn Lực, the profit growth of banks this year might be only about 10 per cent against 20-25 per cent in recent years mainly due to the requirement to make provisions for COVID-19 affected loans.

Banks restructured loans worth about VNĐ350 trillion (US$15.2 billion) for COVID-19 affected borrowers by the end of 2020, Lực said, adding if half of the loans became bad loans, the bad debt ratio of the banking system would increase to more than 3 per cent by the end of 2021.

To control the risk of bad loans, banking expert Nguyễn Trí Hiếu recommended besides actively recovering bad loans, banks must set aside provisions for bad loans and risky loans.

Some banks have already increased provisions for their risky loans.

According to Nghiêm Xuân Thành, Chairman of the State-owned Vietcombank’s Board of Directors, Vietcombank’s bad debt ratio is at 0.61 per cent of total outstanding loans, the lowest level among credit institutions and also the lowest in the history of the bank.

The bad debt ratio of State-owned VietinBank had also declined from 1.2 per cent in 2019 to below 1 per cent in 2020, Trần Minh Bình, general director of VietinBank, said.

Thanks to the bad debt decrease, the bank increased its provisions from 120 per cent to 130 per cent of loans. In 2021, VietinBank aimed to keep the bad debt ratio below 2 per cent while credit was set to grow at 8-11 per cent and profit at 10-20 per cent, Bình said.

Leaders of private commercial banks also said the bad debt situation was being improved. Nguyễn Đình Tùng, General Director of OCB, said bad debt tended to decrease compared to the mid-2020 period. Enterprises were recovering quite quickly with the pandemic controlled.

It was positive as enterprises were recovering earlier than expected thanks to the central bank’s supporting policies for debt restructuring, helping them overcome the crisis.

Source: https://vietnamnews.vn/economy/860130/banks-to-make-provisions-for-covid-19-affected-loans-this-year.html

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VinFast eyes global market, to open car plant in US

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VinFast eyes global market, to open car plant in US

An VinFast car is tested in a factory in the northern Hai Phong City. Photo by VnExpress/Minh Tuan.


VinFast plans to set up an automobile plant in the U.S. as part of its strategy to start selling there in 2022, Bloomberg reported on Tuesday.

The company, a subsidiary of conglomerate Vingroup, did not provide details about when it will be set up or where.

Bloomberg quoted its CEO Thai Thanh Hai as saying: “VinFast’s vision is to become a global smart electric car company and the U.S. is one of the first international markets that we will focus on.

“We will initially develop high-end models for the U.S.”

The company also plans to open 35 showrooms and service centers this year in California state where it has received a license to test autonomous vehicles on public streets.

Malaysian newspaper The Star quoted Hai as saying VinFast believes it can win over American and other overseas customers leery of buying an automobile from a Vietnamese company they know little or nothing about by offering top-quality vehicles with high safety standards and advanced technology.

The company has R&D centers in Australia, Germany and the U.S.

VinFast, founded by Vietnam’s first billionaire Pham Nhat Vuong, began selling cars with BMW-licensed engines in 2019.

Last year it sold 31,500 units, all in Vietnam, where 296,634 cars were sold in all.

Source: https://e.vnexpress.net/news/business/companies/vinfast-eyes-global-market-to-open-car-plant-in-us-4242502.html

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Van Don airport resumes operations today

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Passengers carry out flight procedures at the Van Don International Airport in the northern province of Quang Ninh. The airport has been allowed to resume operations starting today, March 3, after nearly one month of suspension to contain the spread of Covid-19 – PHOTO: NDLO

HCMC – The Ministry of Transport has issued a decision allowing the Van Don International Airport in Quang Ninh Province to resume operations starting today, March 3, after nearly one month of suspension to contain the spread of Covid-19.

The airport has implemented multiple restriction measures and raised the Covid-19 alert level higher than the common standards to ensure the safety of passengers and the airport’s staff members, reported Nguoi Lao Dong newspaper.

Earlier, the ministry decided to shut down the airport in 15 days from January 29 to February 13 to combat Covid-19, as an airport security staff member tested positive for the coronavirus. The ministry later extended the airport’s closure to February 21 and then to March 3.

On February 28, Nguyen Xuan Ky, secretary of the Quang Ninh Province Party Committee, affirmed that the coronavirus cluster at the airport was completely brought under control.

Accordingly, local carriers later announced their plans to resume air services on routes linked to the Van Don airport.

The national flag carrier Vietnam Airlines will operate one weekly flight on the HCMC-Van Don route on Wednesdays between March 3 and 17 and plans to increase it to three flights per week on Wednesdays, Fridays and Sundays from March 18 to December 31 this year. The flights will depart from HCMC at 1 p.m. and from Van Don at 3:45 p.m.

Low-cost carrier Vietjet announced that it will resume air services on the route with four weekly flights this month.

Source: https://english.thesaigontimes.vn/80766/van-don-airport-resumes-operations-today.html

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USTR names three notorious markets for counterfeiting and piracy in Vietnam

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Market surveillance officers suddenly inspect a store at Ben Thanh Market in District 1, HCMC – PHOTO: PLO

HCMC – The Office of the United States Trade Representative (USTR) has included Vietnam’s traditional markets of Ben Thanh and Dong Xuan and online platform Shopee in the list of online and physical markets that reportedly engage in or facilitate substantial piracy or counterfeiting.

The 2020 Review of Notorious Markets for Counterfeiting and Piracy (Notorious Markets List, or NML) of USTR focuses on examining the use of e-commerce platforms and other third-party intermediaries to facilitate the importation of counterfeit and pirated goods into the United States.

“The rapid growth of e-commerce platforms has helped fuel the growth of counterfeit and pirated goods into a half trillion-dollar industry. This illicit trade has an enormous impact on the American economy by eroding the competitiveness of American workers, manufacturers and innovators,” stated the report.

Commenting on this report, the Vietnam Directorate of Market Surveillance under the Ministry of Industry and Trade said the report was done carefully, earnestly and constructively. Related parties can use this report to encourage the private sector and governments to take proper measures against piracy or counterfeiting.

“However, NML neither gives specific evidence on the violations nor reflects the official standpoint of the U.S. Government about the protection and enforcement of intellectual property rights in related countries,” said Nguyen Ky Minh, deputy chief of office at the Vietnam Directorate of Market Surveillance.

For Shopee, the report mentions the entire Shopee platform that covers many countries including Singapore, Malaysia, the Philippines, Thailand, Indonesia, Brazil and Vietnam.

According to the Vietnam Directorate of Market Surveillance, Shopee in Vietnam (Shopee.vn) has the mechanism to resolve complaints about intellectual property rights as well as solutions to manage the products and vendors on its platform.

Regarding the Dong Xuan and Ben Thanh markets, two hotspots of piracy or counterfeiting for many years, the directorate issued Plan No. 3972 in 2019 to address the problems at these two famous traditional markets.

The number of vendors selling counterfeit goods at these markets has dropped significantly over the past two years. Beside this, thanks to sudden inspections by the local authorities and strict sanctions, many stores selling counterfeit products have been closed.

Source: https://english.thesaigontimes.vn/80765/ustr-names-three-notorious-markets-for-counterfeiting-and-piracy-in-vietnam.html

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