Military Bank, Vietnam's sixth biggest bank by market value, has cut bad debt to 1.8 percent of total loans, and its 2016 net profit could grow by 7 to 10 percent, its vice chairman said on Thursday.
Vietnam's banks, once blighted by crippling levels of non-performing loans (NPLs) of as high as 17 percent, are far outperforming its stock market, Asia's strongest market so far this year with a rise of 4.5 percent.
Military Bank, among the few Vietnamese shares that have attracted consistent foreign interest owing to its performance and control of NPLs, plans to keep soured debts under 2 percent of total loans, Vice Chairman Luu Trung Thai told Reuters in an interview.
The bad debt ratio could fall further next year when credit growth may reach 13 to 15 percent, Thai said.
Military Bank's bad debt ratio was 2.7 percent at the end of last year, according to its financial statements.
A strengthening economy and a painstaking restructuring of NPLs to retain clients with troubled businesses contributed to the improved loans situation, Thai said.
"We support customers who seem recoverable," he said. "It's very time-consuming."
Military Bank's shares have risen 21.2 percent so far this year, compared to a 15 percent fall in the Thomson Reuters Asia Pacific Banks Index.
The bank has been looking for one or more foreign financial strategic investors for a maximum stake sale of 20 percent.
It has a fifth of its shares in reserve for that purpose, but its search for a suitable partner has been hampered by the global financial crisis and a loss of confidence in Asian markets, Thai said.
"Of course MB wants a foreign investor to quickly improve our financial capacity, to have support financially and to be able to learn from failure and success... but it's not compulsory," he added.