VIETNAM’S central bank said on Monday (Apr 24) it will restructure loans for some businesses facing difficulties, including delaying loan repayments by up to 12 months, as it seeks to shore up a slowing economy.

The State Bank of Vietnam (SBV) said in a statement the restructuring measures would be implemented through June 2024.

Prime Minister Pham Minh Chinh at the weekend had asked SBV to draft a plan to target more firms for loan restructuring and extend the timeframes, the government said in a separate statement.

Several companies in Vietnam, a regional manufacturing hub, have been struggling with weakening global demand. Exports fell 11.9 per cent in the first quarter of this year.

Vietnam’s economic growth slowed to 3.32 per cent in the January-March period, against a 5.92 per cent year-on-year expansion in the fourth quarter of 2022, and SBV last month cut several policy rates to support growth.

Chinh at a weekend meeting with the central bank also called for commercial banks to cut lending interest rates to support businesses and households, the government statement said.

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In addition, he urged the central bank to support the local corporate bond market by amending existing bond regulations to “facilitate credit institutions to invest in corporate bonds to increase supplies and liquidity”.

The Ministry of Finance said in February that 285.2 trillion dong (S$16.2 billion) worth of corporate bonds will mature this year, 42 per cent of which were issued by real estate developers.

More than half of those bonds are due for repayment between May and August this year, according to data from the Hanoi Stock Exchange and Vietnam’s central bank analysed by private equity firm Dragon Capital.

Last week, auditor PricewaterhouseCoopers (PwC) cast doubt on the financial viability of one of Vietnam’s top listed property developers, No Va Land , which faces large bond paybacks this year amid difficult market conditions. REUTERS