BIDV Chairman Proposes Market-Price NPL Sales as Coverage Hits 5-Year Low

Overview

BIDV (BID, HOSE) chairman Lê Ngọc Lâm has proposed allowing banks to sell non-performing loans at market prices, including below book value, provided the process is transparent and supported by realistic recovery assessments. The proposal comes as system credit outstanding reached more than VND 20.72 quadrillion by 14 October 2026, up 11.44% from end-2025, while the sector’s NPL coverage ratio fell to about 80%, the lowest level in five years, according to FiinRatings data cited in the report.

Key Facts

• Total credit outstanding across the economy reached more than VND 20.72 quadrillion as of 14 October 2026, up 11.44% from end-2025.
• Capital mobilisation rose 11.22% over the same period, trailing credit growth by roughly 0.22 percentage points.
• FiinRatings reported the system NPL ratio stable at about 1.9% in the first half of 2026, while special-mention loans rose to 1.3%.
• The NPL coverage ratio declined to approximately 80%, the lowest in five years.
• Lê Ngọc Lâm, chairman of BIDV, proposed permitting NPL sales at market prices even when below book value, subject to public disclosure and transparency.
• Dr. Cấn Văn Lực, BIDV’s chief economist, flagged rising NPL risk from geopolitical instability and higher input costs affecting corporate repayment capacity and collateral values.

What Happened

The report, drawing on FiinRatings statistics and commentary from BIDV executives, frames bad-debt resolution as a question of capital circulation rather than accounting treatment. A loan left unresolved ties up bank capital that could otherwise fund new lending, while the borrower loses the conditions needed to recover. FiinRatings analysts argued that a stable headline NPL ratio is not sufficient evidence that risk is firmly controlled, because rapid growth in total credit can mask the scale of problem loans. If borrower repayment capacity weakens while provisioning buffers thin out, credit institutions must divert more resources to absorbing losses, weighing on both lending capacity and earnings.

Lê Ngọc Lâm’s proposal is the article’s central policy ask. He argued that maintaining book value does not preserve the real value of a loan, and that prolonged resolution raises asset custody costs, litigation expenses and opportunity costs while collateral values risk further erosion. Sales should therefore be anchored to actual recovery prospects, with appropriate valuation methodology and a clear mechanism for assigning responsibility. Transparency, he said, must cover the entire process, from legal documentation and asset condition to the selection of buyers.

Market Context

BID closed at VND 33,650 on 28 October 2026. As one of the largest state-owned commercial banks on HOSE, BIDV carries a balance sheet heavily weighted toward corporate and infrastructure lending, making the recovery-value debate directly relevant to its provisioning trajectory. The article does not disclose BIDV-specific NPL or coverage figures; the 1.9% NPL ratio and 80% coverage level are system-wide FiinRatings estimates. The broader Vietnamese banking sector has been expanding credit faster than deposits through 2026, a gap that historically tightens liquidity and raises the cost of funding for lenders reliant on wholesale markets.

Strategic Significance

The proposal targets a structural constraint rather than a cyclical one. Vietnam’s NPL framework has long anchored sales to book value, which discourages debt trading because buyers price recovery, not carrying value. Allowing below-book sales would force earlier loss recognition but accelerate balance-sheet clean-up and free capital for redeployment. For BIDV, a bank with substantial legacy exposure to long-gestation infrastructure and state-linked corporate borrowers, a functioning market-price NPL channel could shorten resolution cycles and reduce the compounding cost of holding impaired assets. The counterargument is that below-book sales crystallise losses that would otherwise be spread over time, pressuring near-term earnings and capital adequacy.

What to Watch

• Whether the State Bank of Vietnam issues formal guidance on market-price NPL sales, and on what timeline.
• BIDV’s Q3 2026 financial statements for bank-specific NPL ratio, special-mention loans and provisioning coverage.
• FiinRatings updates to the 1.9% system NPL ratio and 80% coverage estimate for full-year 2026.
• Credit growth versus deposit growth data from the SBV, given the 11.44% versus 11.22% gap reported here.
• Any debt-trading platform or secondary market mechanism announced by the Vietnam Asset Management Company (VAMC).