The World Bank (WB) is willing to provide Vietnam with a new loan to help the country recapitalize the banking system hurt by rising bad debts, said WB’s Vietnam Country Director Victoria Kwakwa.“We would certainly be ready to find the resources to bring to the table, additional to what we’re doing, to support them in this area,” Victoria Kwakwa told Bloomberg in an interview, adding that the Vietnamese government has not asked for the loan.Any new World Bank loan would be in addition to existing lending plans, and it “wouldn’t be smaller than the typical loans we do, which are usually in the hundreds of millions, but we don’t necessarily have to bring everything to the table,” Kwakwa said, adding that the loan may come from some private resources.The Vietnamese government has drawn up plans to restructure the country’s banking system and reduce bad debt, which has hindered economic growth. However, the sum needed to carry out these plans has not been mentioned so far despite calls from international institutions.Fitch Ratings has estimated the cost of recapitalization may range from about 7% of the gross domestic product (GDP) to as much as 20%.An asset management company is expected to be established probably by end-March to resolve toxic debts. (www.bloomberg.com [1] Jan 23)
