Vietnam pushes bank consolidation to aid risk management

Vietnam’s economic expansion has been matched by a proliferation of banks. But the regulator is talking tough and is aiming to halve the number of banks and ramp up their risk management capabilities. Is it going to work?

Ho Chi Minh City, Vietnam

While economies in Europe and North America have been shrinking since 2008, Vietnam’s has boomed – keeping a steady 8%-plus rate of annual expansion, according to the country’s General Statistics Office. High GDP growth went hand-in-hand with a rapid expansion of the banking system: some joint stock banks experienced year-on-year loan growth of up to 100%, according to Karolyn Seet, Singapore-based analyst at rating agency Moody’s Investors Service.

Broader credit growth was similarly turbo

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