Vietnam’s banks are bracing for a new wave of debt recovery as Resolution No 42/2017/QH14 is codified into the amended Law on Credit Institutions, with analysts warning that the full benefits will only be visible from the second half of 2026.

The settlement of bad debts will face many difficulties this year as there are no legal regulations related to repossessing collateral assets, industry insiders said.

Having hold of a large amount of bad debts mortgaged by real estate, Vietnam’s four biggest State-owned banks are urgently recovering the debts, but the work remains tough for them due to the slowdown of the realty market.