The Asia Commercial Bank (ACB) will have to axe its trainees as the State Bank of Vietnam has disallowed its expansion, saying banks should not open new branches since the economy has yet to recover.
ACB, one of Vietnam's biggest banks, has decided it will not offer contracts to its trainees who have undergone a six-month apprenticeship.
It cost the bank a "very large" sum of money to recruit and train them though, Nguyen Thanh Toai, deputy director of ACB, told VnExpress yesterday without providing specific figures.
Toai said the bank had scheduled to establish 16 new branches to bring its total to 350 by year's end, but the central bank rejected the proposal due to concerns over potential ineffectiveness amid the struggling economy.
According to a report released by Viet Capital Securities Company, ACB reported pre-tax revenues of VND1.19 trillion (US$57 million) through the first nine months, down nearly 60 percent compared to the same period last year.
By the end of the third quarter, the bank's loans had not grown, while its bad debts had increased to 2.1 percent from 1.6 percent recorded at the end of the second quarter, it said.
State Bank Governor Nguyen Van Binh told the National Assembly on November 13 that the banking system's bad debts had risen to 8.82 percent since the start of 2012 and could be dealt with though "not easily."
The central bank is forcing lenders to make enough provisions for non-performing loans as part of a plan to strengthen the banking system.
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