Vietnam - SBV's governor releases roadmap for restructuring banking system

The State Bank of Vietnam (SBV)'s governor Nguyen Van Binh has released a roadmap for restructuring the local banking system.

The purpose of restructuring schedule is to make banking system healthy, ensuring competitive capacity of banks, credit supply and appropriate services for the economy, at the same time, develop a healthy financial institution to be able to integrate and compete with other banks in the world, the State Bank of Vietnam (SBV)'s governor told the National Assembly (NA) delegates in the morning November 25 about the restructuring plan for banking system.

Accordingly, in the short term, from now till Q1 2012, the central bank will restructure smaller banks with poor performance and ensure liquidity for these banks.

Particularly, according to the governor, bank restructuring solution will follow three major groups.

Group 1 includes banks with healthy financial situation and large-scale to develop to be key banks. This group is expected to have 15 banks by 2015, accounting for 80% of the market share of the entire system, including 1-2 institutions under regional scale.

Group 2 will be banks with a healthy financial situation but small scale. With this group, the central bank will have provisions to ensure their operation scale in control and ensure the healthy operations of these banks in certain segments.

Group 3 will be banks facing financial difficulties. The central bank will implement restructuring by reorganizing the shareholder structure or making merger into other organizations

Roadmap for bank restructuring as follows:

From now till Q1 2012 the banking system will form three groups of banks.

From Q2 2012 till the end of 2013, the roadmap will complete restructuring for the group 3 and ensure liquidity for banks.

From 2013-2015, the roadmap will strengthen the development of the banking groups, including development key banks.

By 2020, the roadmap will continue restructuring the banking system with an aim to develop four financial institutions under international scale, including 1-2 banks to be ranked into large banks in Southeast Asia region.

According to the governor, currently, ailing banks account for less than 5% in the banking system, so the central bank will strive to use internal resources to restructure these banks, which needs the most supports from state-owned banks. Recently, some large banks have also supported trillions of dong for these banks.

VietBiz24

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