|Bad debts currently is listed at VND142.3 trillion (US$6.78 billion), based upon bank reports, according to SBV Deputy Governor Le Minh Hung.—File Photo
HA NOI (VNS)— The State Bank of Viet Nam (SBV) has discovered two more weak banks and six credit institutions to be restructured this year, along with nine other banks now being monitored.
The work to shore up these banks is likely to be hastened, as the central bank and the targeted institutions have only two weeks to complete this restructuring.
Under the banking restructuring plan, initiated last April in a move to improve the resilience of the money system, the SBV has received proposals from 24 of 25 joint stock commercial banks and has given its approval to 11 restructuring proposals.
The vulnerable banking system had been on the edge of a crisis after many years of excessive credit growth and easy lending to State corporations and cross-shareholding issues.
Bad debts currently is listed at VND142.3 trillion (US$6.78 billion), based upon bank reports, according to SBV Deputy Governor Le Minh Hung. By the end of September, Viet Nam's bad debt accounted for 4.62 per cent of total loans.
"All weak banks have been proactive in implementing measures to restructure and solve wrong-doings under strict supervision of the central bank. These banks now are more stable and operating effectively, in line with safety standards," the central bank reported.
For example, after restructuring and merging, SHB said it earned VND550 billion ($26.19 million) net revenues in Q3, up nearly 43 per cent year-on-year. Accumulated revenues for the first nine months increased 17.7 per cent to VND1.63 trillion ($77.62 million). Only securities investments suffered dual losses, slipping VND3 billion ($142,850) in Q3 and VND11.5 billion ($547,620) in three quarters.
Bad debt reached nearly VND5.1 trillion ($242.86 million) on September 30, representing 7.74 per cent of total outstanding loans – a reduction from 8.5 per cent at the end of 2012.
"The merger turned the bank into a much healthier credit institution. We assumed that the merger and acquisition was a must in the current context," said SHB general director Nguyen Van Le. — VNS