(Repeats from Tuesday, with no changes to text)
HANOI Jan 21 Bad debt in Vietnam's troubled
banking system accounted for 3.79 percent of total loans at the
end of 2013, down by more than half of the ratio recorded a year
earlier, the central bank said on Tuesday.
The Vietnam Asset Management Company (VAMC), a firm set up
by the State Bank of Vietnam to rescue debt-laden lenders, had
bought 40 trillion dong ($1.9 billion) of non-performing loans
(NPLs) since it was set up in July, Le Duc Tho, the head of the
SBV's office, told reporters.
Vietnam has one of Asia's highest ratios of NPLs, which has
squeezed the economy and led to a tightening of credit needed to
boost flagging consumer spending and keep businesses afloat.
The economy expanded 5.42 percent last year, up slightly
from 5.25 percent 2012, which was the slowest in 13 years, with
NPLs - widely estimated to have been in double digits - blamed
for putting the brakes on several years of boom growth.
SBV Governor Nguyen Van Binh in November told parliament the
toxic loans problem would be solved by the end of next year.
Independent economists, however, have long suspected NPL
estimates by banks and the government have been understated.
Investors welcomed the long-awaited formation of the VAMC as
a positive step, but critics say it has insufficient capital to
tackle the problem and it is unclear what exactly is being done
with the debt it buys.
The VAMC plans to take on between 70 trillion and 100
trillion dong worth of NPLs in 2014 and raise its registered
capital to 2 trillion dong, up from the 500 billion it started
with, according to state media.
Loans by Vietnam's more than 40 banks were worth 3,316
trillion dong at the end of October, up 7.27 percent from end of
2012, SBV data shows. Year-end figures were not available.
The government recently announced a decree allowing foreign
institutions to buy bigger stakes in lenders from next month,
capping them at 20 percent for a single "strategic foreign
investor", within a total 30 percent foreign shareholding.
Majority foreign stakes were possible for banks considered
"weak", the decree said.
(Reporting by Nguyen Phuong Linh; Editing by Martin Petty)