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Vietnam wants 15 large lenders by 2015, Central bank says
Vietnam plans to have 15 large commercial banks by 2015 as part of efforts to restructure the industry and respond to lenders facing “financial difficulties,” central bank Governor Nguyen Van Binh said.
The State Bank of Vietnam will let big banks combine with small lenders through mergers and acquisitions, Binh told the National Assembly in Hanoi today. The 15 companies will account for 80 percent of the local banking industry, and two of them should meet international standards by 2015, Binh said.
Communist Party General Secretary Nguyen Phu Trong last month named financial services as one of three areas to focus improvements over the next five years to ease economic instability. The closing of small, under-capitalized banks that are undisciplined lenders and heavy users of interbank funding is “long overdue,” Credit Suisse Group AG (CSGN) said in August.
“There are points of weakness in the banking system which make it difficult for smaller, weaker banks to access liquidity,” said Ashok Bhundia, a fixed-income strategist at Bank of America Merrill Lynch (BAC) in Hong Kong. “Some smaller banks may have to be closed down.”
The bad-debt ratio at Vietnam’s commercial banks is currently 3.3 percent and will increase to a range of 3.6 percent to 3.8 percent by the end of the year, Binh said.
Binh also said ministries are closely monitoring domestic and global markets to “timely” adjust interest rates. Inflation has been slowing, creating conditions for the State Bank of Vietnam to cut rates, the governor told lawmakers.
Vietnam’s credit growth is forecast at 13 percent this year, Binh said. He will target credit expansion of 15 percent to 17 percent in 2012.
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