The State Bank of Vietnam planned to merge six or seven more banks, SBV governor Nguyen Van Binh said.

Among the nine credit institutions restructured in Phase 1, which started in 2011, the Global Petroleum Joint Stock Bank (GPBank) was the last weak bank that had not yet been merged. GBBank would be purchased by a foreign bank this year, Binh said at the Government's regular meeting earlier this week.

Some banks have already been withdrawn from the market through mergers, such as Habubank (merged with SHB), Western Bank (merged with the PVFC financial company), Tin Nghia and De Nhat (merged into SCB).

Binh said that the restructured ailing banks were now stable, and that some of them had not only paid off their refinancing loans to the SBV but also made good on their debts to other banks.

He said that SBV would directly inspect banks or hire independent auditors to do so as the restructuring process continued.

As for bad debts, he said that the percentage of low-quality assets on banks' balance sheets had dropped sharply. The rates range from about 3.6 to 3.9 percent in banks' reports, although the central bank's assessment is up to 7 percent.

He said that the Vietnam Asset Management Company (VAMC) would purchase roughly 70-100 trillion VND of bad debts this year, adding that many foreign partners were also interested in buying the bad debts from VAMC, but they could not do so yet because of legal procedures.

The central bank would issue new circulars on the safety of the credit institutions next month, Binh said.-VNA