HÀ NỘI – Việt Nam will increase the limits of foreign ownership in banks as early as this year to quicken the overhaul of the nation’s banking system and further lure overseas investments to boost economic growth, Prime Minister Nguyễn Xuân Phúc said.

“We will raise the ceiling and will also expand access to the securities market” for foreign investors, Phúc said in an interview with Bloomberg Television’s Haslinda Amin at the Government Office in Hà Nội on Friday. “We will try to make it this year,” he added.

Việt Nam caps foreign ownership in banks at 30 per cent and is seeking more investment to help strengthen the financial system.

Phúc didn’t specify the new ceiling to be introduced this year, but he indicated that the Government might sell out completely from the more troubled banks. He singled out OceanBank, taken over by the State Bank of Việt Nam in 2015, as a weak institution the Government is willing to part with immediately.

“Right now, if there are any foreign investors interested in buying any of our under-performing banks, we will sell them entirely,” he said.

Allowing greater foreign ownership of banks would attract more funds to the country and help the Government deal with non-performing loans, said Trinh Nguyen, a senior economist at Natixis SA in Hong Kong. “This will be a positive step forward should it happen,” she said.

The Government set up the Việt Nam Asset Management Company in 2012 to acquire bad loans from the banks, reducing the ratio to 2.5 per cent of total loans in November from 17 per cent. However, less than 5 per cent of the transferred non-performing loans had been resolved, the World Bank said in July.

As well as considering higher foreign ownership in banks, the Government is pushing ahead with moves to divest State companies outside the financial sector. It’s working to sell its entire stakes in the country’s two top breweries, Saigon Beer Alcohol Beverage Corp and Hanoi Beer Alcohol Beverage Corp. The State Capital Investment Corporation last month sold 78.4 million shares in Vietnam Dairy Products JSC, the nation’s largest company that’s known as Vinamilk. - VNS