Bad debts in Vietnam's banking system eased to 3.59 percent of loans in February 2015, the government said on Wednesday, from 4.75 percent the previous month.
The lower bad debt ratio followed the restructuring of several banks and improved liquidity, Deputy Prime Minister Nguyen Xuan Phuc cited State Bank of Vietnam (SBV) data in his speech at the opening session of the National Assembly.
Phuc did not give the total value of the debt.
Vietnam is recovering from a toxic debt headache and real estate slump caused by unrestrained lending and costly investments by state-run firms in non-core areas. Its non performing loans ratios have been among Asia's highest.
The SBV has allowed banks to increase credit growth and approved five mergers and acquisitions so far this year, with aims to cut the NPLs ratio to below 3 percent by the end of 2015.
The banking sector posted credit growth of 3.97 percent in the first four months of 2015, up from a rise of 0.53 percent in the same period last year, Phuc told the parliament.
Vietnam has projected lending to rise 13-15 percent this year and said it could allow the annual expansion of up to 17 percent to push the economic growth to 6.2 percent, from 5.98 percent recorded in 2014.