The State Bank of Viet Nam (SBV) Governor has approved a plan for restructuring of 11 of the 14 joint stock commercial banks in HCM City.

Fourteen commercial banks in HCM City had earlier submitted a restructuring plan for the term 2013 to 2015 to the SBV Governor for approval, reported Dien Dan Dau Tu (Investment Forum) online.

The Governor rejected the restructuring plans of Sai Gon Thuong Tin commercial bank, HCM City Development Bank and Southern Bank.

Regarding the progress of the restructuring plan, the HCM City-based State Bank branch reported that in 2012, three banks – De Nhat Commercial Joint Stock Bank, Viet Nam Tin Nghia Bank and Sai Gon Commercial Bank – had merged to form the Sai Gon Joint Stock Commercial Bank.

Only the Nam Viet Joint Stock Commercial Bank is processing contents related to the restructuring scheme, which was approved by the SBV Governor under the supervision of the HCM City State Bank branch.

Former central bank governor Cao Sy Kiem, who is now chairman of the Viet Nam Association of Small and Medium Sized Enterprises, said it was fortunate that no commercial bank located in HCM City was facing disruptions despite their weaknesses and difficult finances.

According to the HCM City-based State Bank branch, the total charter capital of the 14 commercial banks in the city reached VND86.77 trillion (US$4.1 billion) by February this year which was not too different as compared to late 2013.

Of this figure, Sai Gon Thuong Tin Commercial Bank had the highest charter capital of VND12.425 trillion($592 million). Currently, the total assets of the 14 banks reached VND1.192,trillion (US$56.3 billion) down by 0.6 per cent against 2013.

Le Manh Ha, Deputy Chairman of the HCM City People's Committee, said that the merger of Southern Bank and Sai Gon Thuong Tin Commercial Bank had been approved in principle by Governor Nguyen Van Binh.

Meanwhile, HCM City Development Joint Stock Commercial Bank (HD Bank) completed its plan to repurchase Viet Societe Generale (SGVF) and to merge into Dai A Bank. After the merger, the charter capital of HD Bank will reach VND8 trillion or up 1.6 times before the merger.

Regarding non-core businesses, Nguyen Hoang Minh, Deputy Director of the HCM City-based State Bank branch said all banks have continued to focus on securities because of stability and safety.

By February, the total bad debt of these banks in the city stood at VND45.8 trillion ($2.2 billion). The State Bank has assigned relevant bodies and credit institutions in the city to develop solutions and a roadmap to handle bad debts and curb risks of bad debts that could arise in the future.

In a working session with the city authorities, Chairman of the National Assembly Committee for Economic Affairs Nguyen Van Giau said that authorities had rampantly approved many projects, but many of them had still not been launched due to lack of funds.

The cross-holding between banks is being comprehensively and cautiously processed by the central bank so as to stabilise the banking system.

Giau said capital source management funds and the banking system needed to be on top of the agenda while restructuring the economy.