Vietnam Forms Panel to Restructure Banks by 2015 to Boost GrowthBloomberg News
Vietnam will set up a committee to restructure its banking system by 2015 as the nation tries to bolster an economy expanding at the slowest pace in 13 years.
Prime Minister Nguyen Tan Dung has appointed Deputy Prime Minister Vu Van Ninh as head of the panel and central bank Governor Nguyen Van Binh as the deputy, the State Bank of Vietnam said in a statement on its website today. The committee will coordinate with ministries and local officials, it said.
Dung in February approved a master plan to revamp the economy after the government last year pledged to speed up overhauling banks as a slump in lending crimped domestic demand and corporate expansion. The health of Vietnam’s lenders is a growing concern, the World Bank said in December, citing their deteriorating asset quality and slow progress in restructuring.
“Forming such a committee will help improve the institutional coordination between government bodies that has been an obstacle in the restructuring process,” said Nguyen Xuan Thanh, a Ho Chi Minh City-based lecturer with the Harvard Kennedy School’s Vietnam program. “But how much it can do to solve the problem is a question.”
Of the five banks listed on the Ho Chi Minh City Stock Exchange, four rose, with Vietnam Joint Stock Commercial Bank for Industry and Trade climbing 2.1 percent as of 1:30 p.m. local time. The benchmark VN Index gained 0.7 percent.
The bad-debt ratio at Vietnam’s banks dropped to 6 percent of total outstanding loans as of Feb. 28, from “about 8 percent” last year, after the central bank requested lenders to resolve the issue of non-performing loans by using their provisions for losses, Vu Duc Dam, Chairman of the Government Office, told reporters last month.
Separately, the monetary authority said in a statement on its website yesterday that it will put some banks under “special surveillance” because they risk losing payment ability or have serious violations.
The central bank will monitor the daily operations of such banks, and the Governor can ask these lenders to boost their chartered capital, submit restructuring plans, or force them to merge with other lenders, according to the regulation which will be effective April 27.
Vietnam’s government will prepare a road map by June for restructuring its 52 biggest companies, Deputy Finance Minister Truong Chi Trung said in a Feb. 1 interview. The economy grew 5.03 percent in 2012, the slowest pace since 1999. The World Bank in December forecast expansion will be 5.5 percent this year, a third straight year of below 6 percent growth.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- Electric Buses Are Hurting the Oil Industry
- Why High-Flying U.S. Home Prices Seen Getting Another Jolt
- Stocks Push Higher; Dollar Reaches 3-Month Peak: Markets Wrap
- Stocks Sink as Caterpillar, 3% Yields Rattle Bulls: Markets Wrap
- American Cities Are Fighting Big Business Over Wireless Internet, and They’re Losing