News
RETAIL BANKING | Cesar Tordesillas, Vietnam
view(s)

Vietnam wants to have 15 large banks by 2015

Vietnam’s central bank plans to create a three-tiered financial industry dominated by 15 lenders.

The country aims to have 15 “big” banks by 2015 that make up about 80 percent of the local market, with two meeting international standards that will enable them to compete with regional lenders, State Bank of Vietnam Governor Nguyen Van Binh told lawmakers in Hanoi today. There are currently 42 Vietnamese banks, including five state-owned commercial lenders.

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. Vietnamese banks face more challenges in funding and liquidity management than Asian counterparts because of depositor sensitivity, inconsistent and changing government policies, and inflation, according to Moody’s Investors Service.

“The overall health of the banking system in Vietnam is weaker than that of its neighbors,” said Karolyn Seet, a Singapore-based assistant vice president at Moody’s. Lack of transparency, high corporate indebtedness and lax loan classification are also impeding Vietnamese lenders, she said.

The central bank will encourage mergers and acquisitions as one way to bolster weaker banks, Binh told the National Assembly. The 15 large lenders will serve as “pillars for the banking system,” he said. The second category will consist of smaller banks that are healthy, and the third will include firms facing “financial difficulties” that need restructuring, the governor said.

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.