Vietnam’s banking sector is still recovering from the national banking crisis of 2011, when a combination of poor risk management and soaring levels of non-performing loans (NPLs) led to the collapse of some institutions and the capital erosion of many local banks.
The State Bank of Vietnam (SBV), the country’s central bank, is rolling out reforms to clean up banks’ balance sheets. But although this policy is generating a positive mentality shift, the path to strengthening the banking market remains difficult. Capitalisation across the sector is low and the NPL question is far from resolved.
