The State Bank of Vietnam will next year resolve half of the burden of bad debt, which now accounts for more than 8 percent of the banking system's total lending, the government said on Wednesday.
Lenders will resolve VND40 trillion to VND50 trillion (S$2.4 billion S$2.9 billion) out of their sour loans by making provisions, central bank governor Nguyen Van Binh was quoted as saying on the government's news web site.
The national asset management company, the establishment of which is expected to be approved by the government, may settle another 100 trillion dong, Mr Binh said in the report.
Talks about the asset management company helped lift the VN Index on Vietnam's main stock market slightly on Wednesday, analysts said.
The index gained 0.67 percent to 404.02 points by 0603 GMT.
Non-performing loans rose to 8.82 percent of total loans by Sept. 30 from 8.6 percent in March.
State-controlled lenders accounted for 44.26 percent of the total bad debt and partly private banks carried 35.3 percent, state media has said.
The government aims to bring the bad debt ratio to 3-4 percent of total lending by the end of 2015, Prime Minister Nguyen Tan Dung has said.
Total loans in Vietnam's banking system are estimated at VND2,500 trillion to VND2,700 trillion, the government has said.