GP.Bank is one of three partly private commercial banks taken over by the central bank early this year. File photo
The State Bank of Vietnam has started loosening its control over three banks which it took over early this year, saying the banks have become stronger, local media reported on Tuesday.
Nguyen Huu Nghia, chief inspector of the central bank, was quoted as saying at a conference on Monday that CBBank, GP.Bank and OceanBank have been doing well.
The banks have managed to set aside reserves totaling VND11 trillion (US$483.8 million), meaning that they are now able to make payments and expand their business, he said.
The banks, which were all partly private before the takeovers, were acquired at zero dong between March and July, as their equity went below zero.
One of the first steps reflecting the central bank's loosened control is that the banks have been allowed to increase their lending in certain sectors which are deemed "safe," news website VnEconomy reported.
The banks' administrative positions, however, continue to be taken by personnel from Vietcombank and Vietinbank assigned by the central bank, it said.
The takeovers were part of the central bank's efforts to revamp the local overcrowded banking sector.
Over the past four years the number of local commercial banks has been reduced to 34 from 42 previously, according to official figures.
The central bank has managed to reduce the ratio of non-performing to outstanding loans from 4.93 percent estimated in September 2012 to 3.21 percent in August, deputy governor Nguyen Kim Anh said at the same conference.
Over the years, the bank has tackled over VND424 trillion ($18.65 billion) worth of bad debts, or 91.5 percent of the sector's total non-performing loans. The state-owned Vietnam Asset Management Company bought 41.3 percent of that amount.