Six to seven banks to be merged, says Central bank’s Governor
Six to seven banks to be merged, says Central bank’s Governor
Six or seven banks are to be merged this year, according to information disclosed by Nguyen Van Binh, Governor of the State Bank of Vietnam, at the monthly government meeting on April 1. This will bring the number of dissolved banks to seven to ten.
Since late 2011, the central bank has handled nine ailing banks. Some banks have already been withdrawn from the market through mergers. These include Habubank (merged into SHB), Western Bank (merged with the PVFC financial company), Tin Nghia and De Nhat (merged into SCB). There have also been brands, not considered ailing, that have disappeared from the market after merging with other banks. DaiA Bank is one such example.
Previously, Binh reported to the National Assembly that the central bank had identified an additional two weak banks and six credit institutions whose situations need to be addressed.
Binh said that GPBank – the last weak bank that has not yet been merged – will be purchased by a foreign bank this year. Other ailing banks, according to him, are stable now. Some of them have not only paid off their refinancing loans to the State Bank but have also made good on their debts to other banks, escaping their formerly fragile statuses.
Also, according to the Governor, from the second quarter the state bank will launch a series of new measures and restructuring programs to enhance the capacity of credit institutions. From the first quarter, the central bank proposed that the State Bank Inspectorate, along with independent auditors, directly inspect the credit quality of banks.
As to bad debts, according to Binh, the percentage of low-quality assets on banks’ balance sheets has fallen sharply. The rates range from about 3.6 to 3.9 percent in banks’ reports, although the central bank’s assessment is up to 7 percent.
The Governor also reemphad the feasibility of the goal, previously announced, of VND70-100 trillion of bad debts being purchased by the Vietnam Asset Management Company (VAMC) in 2014. He went on to say that many foreign partners are interested in buying the bad debts from VAMC, but they cannot be sold as of yet because of legal procedures.
The Governor said that credit in the entire system has started to grow positively (about 0.01%) since late March. "The goal of the yearly credit increase of 12-14 percent is workable," he said.
vietnamnet
