The Prime Minister has approved a plan to restructure "weak" banks in association with settlement of bad debts for the 2021-2025 period, said Deputy Prime Minister Pham Binh Minh.
The government has also asked the Politburo, the Party's premier decision-making body, to issue mechanisms to deal with the banks, including Saigon Commercial Bank (SCB), and restructure the wholly state-owned Vietnam Development Bank (VDB), the Deputy PM said at a conference on Tuesday.
The other banks named were DongABank, Construction Bank, Oceanbank, and GPBank.
According to the Ministry of Planning and Investment, by the end of October 2022, the Vietnamese banks' ratio of bad debt to outstanding loans was 1.92%.
The ratio of bad debts and debts sold to the Vietnam Asset Management Company (VAMC) that were unresolved and doubtful debt to total outstanding loans was 4.5%.
In mid-October, the State Bank of Vietnam put SCB under special control to stabilize its operations and limit negative impacts on the bank and the country's banking system.
The HCMC-headquartered bank was originally a merger among three banks: SCB, First Joint Stock Commercial Bank (FCB) and Vietnam Tin Nghia (TNB). It is one of the five largest Vietnamese by assets.
On October 7, many SCB branches and transaction offices recorded a run of withdrawals due to concerns about the bank’s financial health.
The withdrawals were triggered by news of the sudden death of Nguyen Tien Thanh, chairman and CEO of Tan Viet Securities and also an independent board member of SCB; and the arrest of Truong My Lan, chairwoman of property developer Van Thinh Phat Group.