The government has asked the Politburo to issue mechanisms to deal with weak banks, including the Saigon Commercial Bank, and restructure the State-owned Vietnam Development Bank, according to Deputy Prime Minister Pham Binh Minh.

Other weak banks in need of restructuring are DongABank, Construction Bank, Oceanbank, and GPBank, he told a recent teleconference held between the government and localities.

Such restructuring is aimed at stabilizing these banks’ operations and helping them to gradually recover.

The government dealt with many long-standing issues in the banking sector last year. For example, the Prime Minister approved a master plan on restructuring credit institutions in association with the settlement of bad debts in the 2021-2025 period.

As of the end of October, Vietnamese banks’ ratio of bad debts to outstanding loans was 1.92 per cent, according to a report from the Ministry of Planning and Investment.

The ratio of bad debts, debts sold to the Vietnam Asset Management Company (VAMC) that were unresolved, and doubtful debts to total outstanding loans was 4.5 per cent.