This showed improvements in financial capacity of credit institutions over the years, stated the SBV’s report to the National Assembly.

Additionally, the sector’s equity stood at VND792.6 trillion (US$33.85 billion), up 4.2% against the end of 2018 and 20.1% against the end of 2017.

According to the SBV, most banks should be able to meet the requirements on capital adequacy ratio (CAR) following Basel II standards, scheduled for implementation on January 1, 2020.

As of present, seven commercial banks have qualified for the Basel II standards, including Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Vietnam International Bank (VIB), Orient Commercial Bank (OCB), Military Bank (MBBank), Vietnam Prosperity Bank (VPBank), Tien Phong Commercial Bank (TPBank), and Asia Commercial Bank (ACB).

Moreover, the credit quality has been improved with credit institutions adopting drastic measures solving bad debts and preventing new bad debts.

Resolution No.42, which came into effect last August providing special pilot treatment of bad debts at credit institution, has been pivotal in restricting the bad debt ratio below 3%. The toxic debt ratio stood at 2.02% as of March.

Total assets of the banking sector amounted to VND11,000 trillion (US$470 billion), up 0.8% compared to the end of 2018, while the combined deposits stood at VND8,500 trillion (US$363.16 billion), up 2.5% year-on-year.

Total outstanding loans and interest rates remain stable, serving as key support for enterprises in business operation and facilitating economic growth.

The report pointed out banks’ governance capacity, internal audit and risks management have gradually improved and are in compliance with international practices, translating in greater transparency.

Notably, commercial banks with state holding 50% of charter capital continue to play a key role in the sector.

The SBV has completed restructuring scheme in the 2017 – 2020 period for four state-run commercial banks, with a focus on resolving bad debts.

To ensure that state-owned banks qualify for Basel II standards, the SBV is working on plans to raise charter capital at those banks as per the prime minister’s instructions. Hanoitimes

Ngoc Thuy