Foreign banks continue to affirm their important position in Vietnam. They now hold assets valued at over 420 trillion VND (20 billion USD), or 11.25 percent of the entire finance sector, according to State Bank governor Nguyen Van Giau.

He released the figures at a meeting with representatives from foreign banks late last week.

According to the data, total capital mobilisation reached nearly 364 trillion VND (17.3 billion USD), an increase of 33.8 percent. Total outstanding loans stood at over 230 trillion VND (10.9 billion USD), marking an increase of 26 percent against 2009 and accounting for a 10.77 percent share of the banking system's credit market.

By October 31, Vietnam had 71 foreign credit institutions and 48 representative offices operating in the country.

After operating for one year, five foreign banks have 14 branches nationwide while the number of joint venture banks remains unchanged at 30.

Most of these institutions are investing in the production and service industries. Real estate loans and securities account for only a low proportion of trade.

The majority of foreign credit institutions have carefully implemented credit policies that help minimise bad debt. They maintain levels below 1.5 percent of total outstanding loans.

The bad debt of wholly-foreign invested banks reached only 0.4 percent. However, the ratio of bad debt from foreign banks still increased to 60 percent, or 2.7 trillion VND (128 million USD).

According to Governor Giau, the global economy is predicted to bounce back further next year and strong growth rates are expected, although not guaranteed.

Next year, the State Bank of Vietnam would monitor carefully monetary and financial policy to curb inflation and stabilise the country's economy, he added.

The banking system would begin the new year by implementing State Law and a new law on credit. This would be an important milestone in bringing the banking system in line with the market economy, Giau said./.