According to the State Bank of Vietnam (SBV)’s Governor Nguyen Van Binh, the banking system restructuring will have a breakthrough in the near future.
On July 9, 2014, the SBV held a conference on the first 6 months of operations and deployment of tasks for last 6 months of the banking sector. Credit growth and banking sector restructuring were emphasized by the Governor at this conference.
Binh said non-performing loans (NPLs) have been gradually handled. For the first time, credit institutions voluntarily set aside credit risk provisions. That is the basis of ensuring the safety of the banking system and contributing to handling bad debts.
The Governor admitted that handling bad debts seemed to be slow recently, but the slowdown is to improve legislation. From now until the end of this year, bad debts will continued to be handled, risk provisions will be enhanced. So far, Vietnam Asset Management Company (VAMC) has purchased approximately VND50 trillion NPLs and plans to buy about VND70-100 trillion this year.
In this context, in the remaining 6 months of 2014, the banking sector will continue to deploy solutions for restructuring of credit institutions in accordance with the objectives and timeline of the restructuring scheme of the credit institution system for the period 2011-2015 approved by the Prime Minister.
As emphasized by the Governor, the banking system restructuring will have a breakthrough in the near future. So far, only small and weak banks have been restructured. In the last 6 months of this year, big joint stock commercial banks will also be restructured.
Source StoxPlus