At state major Vietcombank, total bad debt by the end of the first quarter reached $435 million, up 12.4 per cent from the end of 2025.

Although potentially irrecoverable loans (Group 5 loans) declined slightly to $332 million, doubtful loans (Group 4 loans) rose to $63 million, more than seven times higher than at the beginning of the year.

Substandard loans (Group 3 loans) increased nearly 28 per cent, while special mention loans (Group 2 loans) climbed almost 50 per cent to $162 million.

Speaking at Vietcombank’s 2026 AGM on April 24, CEO Le Quang Vinh said rapid growth could deliver short-term results but would also lead to higher bad debt risks and provisioning costs later.

“Vietcombank’s proactive control of speculative real estate lending, while prioritising capital for industrial property, social housing and segments serving genuine housing demand, reflects a clear choice: accepting cautious growth to avoid deteriorating asset quality,” Vinh said.

Southern lender ACB recorded similar signals. The bank’s total bad debt increased by 2.8 per cent in Q1 to $274 million, but substandard loans surged 46 per cent, while special mention loans rose by more than $100 million to nearly $200 million, marking the sharpest increase among debt categories.

State lender BIDV was not outside this trend as the bank’s total bad debt rose 21.9 per cent during the period to $1.71 billion by the end of March, pushing the bad debt ratio from 1.47 per cent to around 1.76 per cent. Meanwhile, loan loss provisions increased only 6.1 per cent, equivalent to a loan loss coverage ratio of around 87 per cent.

At MB Bank, Group 3-5 loans rose nearly 14 per cent in Q1, causing the bad debt ratio to increase from 1.29 per cent to 1.42 per cent, while the loan loss coverage ratio hovered around 92-93 per cent.

With a credit growth target of up to 30 per cent this year, pressure on the bank’s asset quality management is expected to become much greater.

Meanwhile, Techcombank has developed two bad debt control scenarios for this year: below 1.5 per cent under favourable conditions and below 2 per cent if geopolitical conflicts in the Middle East persist and economic impacts last longer than expected.

This indicates that even banks with some of the strongest asset quality remain cautious about the bad debt trend.

According to analysis by Viet Dragon Securities, interest rates on existing loans have risen to levels comparable to 2022-2023 when bad debt surged sharply. This may be one of the main reasons behind the return of bad debt this year.

What is concerning is not only the rise in bad debt across the banking sector, but also the weakening risk absorption capacity at many banks as bad debt coverage ratios decline.

Eximbank is one of the clearest examples of rising bad debt combined with thinning provisioning buffers.

In Q1 of 2026, the bank posted pre-tax profit of $13.5 million, down nearly 60 per cent on-year. The main reason was a 2.5-fold increase in the bank’s credit risk provisioning costs.

Total bad debt (Group 3-5 loans) at Eximbank by the end of March rose 10 per cent from the beginning of the year to $232 million, pushing the bad debt ratio to 3.07 per cent of total outstanding loans.

Despite sharply increasing provisions, the bank’s bad debt coverage ratio declined from 44 per cent to 38 per cent.

At Sacombank, the first quarter of 2026 marked the second consecutive quarter in which the bank recorded the highest bad debt ratio in the system at 6.62 per cent.

Total on-balance-sheet bad debt reached nearly $1.66 billion. To address this, Sacombank had to set aside provisions of up to $81 million in Q1, more than 10 times higher than the same period last year.

Against this broader backdrop, state major VietinBank was among the few bright spots, recording a clear improvement in its bad debt ratio.

Specifically, the ratio declined from 1.1 per cent to 1.02 per cent, while potentially irrecoverable debt fell sharply from nearly $794 million to $476 million.

2026 could become a year that tests the resilience of the banking system as pressure will not stem from a single shock such as corporate bonds or a frozen real estate market, but rather from the combined effects of persistently high interest rates, prolonged weakening in corporate health, low capital absorption capacity and increasingly limited room for monetary policy easing.

Against this backdrop, bank profits should be viewed more cautiously. Large profit figures do not necessarily reflect strong asset quality if they are accompanied by delayed provisioning.

Conversely, banks willing to accept lower profits to address bad debt early may ultimately prove to be safer institutions for the next growth cycle.