Vietnam Government Urges Faster SCB Collateral Handling in Resolution 262

Overview

The Vietnamese government has issued Resolution 262/NQ-CP, dated September 5, 2026, directing the State Bank of Vietnam (SBV) to accelerate the restructuring of weak banks, with specific emphasis on resolving collateral assets of Saigon Commercial Bank (SCB). This policy action underscores the government’s commitment to stabilizing the banking system and addressing legacy asset quality issues at SCB, which remains under special control.

Key Facts

• Resolution 262/NQ-CP was issued on September 5, 2026, following the government’s regular August meeting.
• The resolution explicitly requires the SBV to speed up the handling of SCB’s collateral assets.
• The government mandates continued restructuring of credit institutions linked to bad debt resolution.
• The SBV is tasked with enhancing supervision, inspection, and early warning systems to identify and handle risks and violations.
• Credit institutions must improve governance, financial capacity, risk management, and internal controls, and strictly control transactions with shareholders and related parties.
• The SBV is directed to maintain flexible monetary policy, coordinating with fiscal policy to control inflation and ensure macroeconomic stability.
• Credit growth is to be managed flexibly, directing capital to priority sectors such as exports, high-tech, social housing, and essential infrastructure.

What Happened

The Vietnamese government issued Resolution 262/NQ-CP on September 5, 2026, following its regular monthly meeting for August. The resolution outlines directives for the State Bank of Vietnam (SBV) to intensify efforts in restructuring the credit institution system, with a focus on resolving bad debts and handling weak banks under special control. Notably, the resolution specifically calls for accelerating the implementation of plans to handle collateral assets of SCB, a bank that has been under state supervision due to past financial difficulties.

The government also instructed the SBV to improve its supervisory and inspection capabilities, ensuring timely identification and resolution of risks and violations. Additionally, the resolution emphasizes the need for credit institutions to strengthen their governance, financial health, and risk management practices, while strictly controlling related-party transactions. The broader monetary policy directives include maintaining flexible and effective policy coordination to support economic growth while keeping inflation in check.

Market Context

SCB, listed on the UPCOM exchange, has been under special control by the SBV since 2022 following a run on deposits. The bank’s shares are not actively traded, and its financial health remains a concern for the banking sector. The government’s renewed emphasis on resolving SCB’s collateral assets is part of a broader effort to clean up the banking system, which has been a key theme in Vietnam’s financial policy. This resolution aligns with ongoing sector-wide restructuring, as the SBV continues to address weak banks and non-performing loans.

Strategic Significance

For long-term investors, this resolution signals that the Vietnamese government remains committed to resolving SCB’s issues, which could eventually lead to a clearer path for the bank’s recovery or potential merger. The focus on collateral asset handling suggests that the SBV is moving toward tangible asset disposal, which could improve SCB’s balance sheet over time. However, the timeline remains uncertain, and investors should view this as a gradual process. The broader banking sector may benefit from reduced systemic risk as weak banks are restructured, potentially improving overall sector stability and investor confidence.

What to Watch

• Progress on SCB’s collateral asset sales, including any major transactions or auctions announced by the SBV.
• Updates on SCB’s special control status and any potential merger or restructuring plans.
• SBV’s quarterly reports on bad debt resolution and credit institution restructuring.
• Changes in monetary policy, particularly interest rate adjustments, that could affect bank profitability.
• Any new regulations or circulars related to weak bank handling and asset management companies (e.g., VAMC).