Vietnam Yet to Fix ‘Dire Situation’ of Weak Banks, IMF Says

Vietnam has yet to resolve the “dire situation” facing its weakest banks and deposit-rate cuts will make it more difficult for such lenders to attract funds, the International Monetary Fund said.

The government should separate bad assets of weaker lenders as part of its restructuring plan, and consider selling the holdings to a private or public asset management company, Masato Miyazaki, the IMF’s chief for the country said in a telephone interview in Hanoi yesterday. A failure to resolve bad debts may erode confidence in the banking industry, he said.