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The article reports on the issues facing banking industry in Vietnam. It highlights the difficulty of many of majority state-owned banks in the country to remain solvent after a business cycle that has affected Vietnam's economy over the past five years. It emphasizes the need of country's central bank to overcome its fear of foreign control and open the industry to international investors.

The article reports on the continued international capital flows into Vietnamese stocks, leading several foreign investors to hit their share ownership limits. It details how the investment ceiling has forced money into bonds instead, pressuring policymakers to liberalise the restriction. The lack of liquidity in the Vietnamese banking sector is noted.

The article reports on the plan of the Vietnamese government to issue additional bonds in 2013. The move was made due to the crisis in the Vietnamese banking sector, as well as low growth and declining taxes. The initiative aims to encourage international investors and help develop the domestic bond market. The growth of the Vietnamese market and the efforts of the government to stimulate the economy are highlighted.

The article focuses on Vietnam's plan to launch in December 2012 an asset management company (AMC) that will deal with the country's non-performing loans (NPL). As of September 2012, the official figure on total NPLs in the banking system was 8.82%, according to the State Bank of Vietnam (SBV). Robert Zielinski, head of research at VietCapital Securities, said that these figureshave provided the impetus needed to move forward with the plan to establish an AMC.

The article reports that yields on Vietnamese sovereign bonds have fallen by up to 55 basis points (bp) in November 2012 and are expected to drop a further 30bp as supply wanes and banks seek out risk-free assets to absorb surplus liquidity. According to VietCapital Securities, banks will continue to invest into risk-free assets due to problems with non-performing loans (NPL). Data from the State Bank of Vietnam show that the total number of NPLs as of September 2012 is 8.82%.

The article predicts a decline in sovereign bond yields as increasing liquidity at Vietnamese banks and low credit growth prompt lenders to transfer surface capital to the bond markets. As of October 2012, credit growth across the domestic banking sector dropped to 3.3%. According to Vietcombank Securities, the drop in credit growth can be attributed to high non-performing loan figures. An excess liquidity issue faces lenders due to the imbalance between credit and deposit growth.

The article focuses on a plan by the State Bank of Vietnam (SBV) to ban commercial banks from raising deposits and lending in a foreign currency in a bid to boost demand for the dong. According to Le Xuan Nghia of the National Financial and Monetary Policy Advisory Council, the ban will take effective from 2015 to 2016. Emerging Asia economist Matt Hildebrandt describes the economics behind the policy as brutal.

The author calls on reforming financial leasing firms in Vietnam through joint ventures. She claims that a reform could relieve credit pressures on Vietnamese banks and help stimulate stagnant business growth. She also discusses the complexity of addressing the disadvantages of strict regulations on bank lending to subsidiaries.

The article reports on how Vietnam's banks are a major structural weakness that hinder the country's economic growth. The country's banking sector is described as weak as it remains reluctant to lend, which dampened the impact of interest rate cuts. The government's economic growth forecast has been revised down to 5.2 percent.

The article reports on the impact of high and rising levels of non-performing loans (NPLs) on the recovery of credit growth in Vietnam in 2012. There has been a significant drop in credit growth in the country due largely to the impact of tight monetary policy on domestic demand. Credit growth dropped to 4.5 percent year-on-year in the first half of 2012.

The article reports that Vietnam's Prime Minister Nguyen Tan Dung has ordered that a list of the nation's weakest banks be made public. According to State Bank of Vietnam's (SBV) head of monetary policy Nguyen Thi Hong, the prime minister has asked for details about the non-performing loans in the country's weakest banks, while the SBV prepares a detailed plan for dealing with bad debts. The SBV has announced in February 2012 that it has categorized domestic banks based on financial strength.

The author asserts that Vietnam's introduction of Central Resolution 4 may lead the way towards greater financial market transparency in the country. According to the author, it is a self-criticism campaign that may serve as a catalyst for financial reform. She claims that it can increase transparency in non-performing loans (NPL) and state-owned enterprises. She adds that NPL estimates have been below three percent for years, but a 2012 report reveals that they are closer to nine percent.

The article reports that the number of non-performing loans in Vietnam has risen by over 100 percent in 2012 since the end of 2011. According to analysts, this increase is not caused by a deteriorating banking industry, but is actually a sign that the country is ready to address the reform its bad debt issues. VietinBank has revealed that, as of the end of the first half of 2012, the country is sitting on bad debts worth 2.254 trillion Vietnamese dong, 147 percent higher than the start of 2012.

The article reports that the Vietnamese government is planning to use financial instruments instead of cash to resolve the issue of non-performing loans (NPL). The government's decision has reportedly allayed fears that inflation will rise in the country. The government also claims that the State Bank of Vietnam is setting up an asset management company to deal with the NPL problem. VietCapital Securities analyst Phong Nguyen has stated that the solution offered by the government is not enough.

The article reports that sovereign bond yields in Vietnam dropped to a three year low in 2012 as banks recoil from a new cap on lending rates. The State Bank of Vietnam (SBV) published a circular on May 4, 2012 specifying that the maximum short-term lending rate by credit institutions for borrowers is now 15%. The decline in yields is expected to be temporary, however, as banks seek higher returns.