The Vietnamese government said on Friday it has issued an authorization that would allow Thailand's Siam Commercial Bank (SCB) to convert a debt-laden joint venture business in the country into a wholly owned operation.
In a report on its news website (chinhphu.vn), the government said that should it wish to do so, SCB would be clear to take over the JV, known as VSB, along with its property and debts, and establish a fully owned business in Vietnam.
VSB, which operates a handful of outlets in Vietnam, was formed in 1995 by SCB, Thai conglomerate Charoen Pokphand Group and Vietnam's state-owned Agribank, the country's top lender by assets.
Officials at SCB in Bangkok could not be immediately reached for comment.
The authorization comes as the Southeast Asian country seeks to reform its crowded banking sector, plagued by bad debts after years of risky lending and non-core investments by state-owned enterprises that surged when the property market froze.
The State Bank of Vietnam, which would issue guidance on any SCB deal, has already agreed to eight banking consolidation deals so far this year.