Vietnam to release banking data, report on state companies

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Vietnam set a schedule for data releases such as bad-debt ratios and Prime Minister Nguyen Tan Dung ordered the publication of a report on state-owned companies' finances, following calls for more transparency.

The State Bank of Vietnam will release banking industry data including the loan ratios and return on equity, as well as figures on the nation's balance of payments, it said in a statement posted on its website Monday. The "significant" changes will be effective April 1, 2012 and aim to "enhance openness and transparency in Vietnam's banking activities, and move toward international standards and practices," it said.

The International Monetary Fund has called for Vietnam to release data "in an open and timely manner" and Moody's Investors Service has said a "lack of clarity" makes it difficult to assess the capital position of Vietnamese banks. The nation has struggled with risks in the banking industry, the highest inflation in Asia, a trade deficit and slowing growth.

"The government hasn't always had this openness in the past, but the question is what will happen after the information is out," said Marc Djandji, director of research at Viet Capital Securities Joint-Stock Co. in Ho Chi Minh City. "The reports will identify problems, but you also need to find solutions to the problems and to act on those solutions."

State-owned companies

Dung asked the Ministry of Finance to make public a government report on state-owned companies' finances and operations, according to a statement posted late Monday on the government's website. It didn't say when the report will be released.

The State Bank of Vietnam said its new rules will stipulate how information will be released and by whom at the monetary authority. They aim to prevent inaccurate information, it said.

The restructuring of public investments, financial services such as banks, and state-owned enterprises are three main areas of focus for the Vietnamese government over the next five years, Communist Party General Secretary Nguyen Phu Trong said in a speech last month.

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Vietnam plans new reforms

Trong's comments indicate the party is in agreement on the need for reforms, Ho Chi Minh City-based fund manager Dragon Capital said Monday, in a UK Regulatory News Service note.

"The main challenge will be to transform the party's high determination into specific action plans," Dragon said, in a monthly update on the UK- listed Vietnam Property Fund Ltd., which it manages.

Stock slide

Vietnam's benchmark VN Index of stocks has slumped about 20 percent so far this year, as the threat to global growth from Europe's deepening sovereign-debt crisis leads investors to shun emerging-market assets. The dong has weakened more than 7 percent over the period, according to data compiled by Bloomberg.

Vietnam's inflation rate was 21.59 percent in October, easing from 22.42 percent in September. The pace is the fastest in a basket of 17 Asia-Pacific economies tracked by Bloomberg.

The government must make more efforts to impose "market discipline on large state-owned enterprises," the Asian Development Bank has said. The default on foreign-currency borrowings last year by Vietnam Shipbuilding Industry Group, known as Vinashin, has raised doubts about asset quality at Vietnamese banks, Moody's Investors Service said in September.

The Southeast Asian nation's gross domestic product may climb 5.8 percent in 2011, the slowest pace since 2009, ADB figures show. The economy, a production hub for companies from Intel Corp. to Honda Motor Co., expanded 6.8 percent last year.

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