Vietnam mounts ‘unprecedented’ $24 billion rescue for bank engulfed in giant fraud, documents show

Vietnam has mounted an "unprecedented" rescue of Saigon Joint Stock Commercial Bank, a lender engulfed in the nation's biggest financial fraud, according to three bank documents and new official information provided to Reuters by a person with access to the documents.

"Without lending, SCB will collapse," according to the new information provided to Reuters. "If the lending continues, the national treasury will gradually dry up."

Reuters is not identifying the source more specifically due to the sensitivity of the matter.

The new information also described the situation as "unprecedented" for the massive volume of the cash injections, the complexity of the operation and the scale of existing and potential damage to Vietnam's financial system.

Reuters was unable to establish whether the conclusions about the impact on state coffers were broadly shared by other officials currently involved with monitoring SCB.

Vietnam's public debt was stable last year at 37% of gross domestic product, while the budget deficit widened slightly to 4.4% of GDP. Foreign reserves were around $100 billion at the end of the year, according to the central bank. That is up from about $90 billion at the end of October, according to the independent regional watchdog ASEAN+3 Macroeconomic and Research Office.

As of the start of April, the Southeast Asian nation's central bank had pumped $24 billion in "special loans" into SCB, according to one of the bank documents seen by Reuters, which provides daily updates since March 29 on overall injections from the central bank.

Lending has slowed slightly but averaged more than $900 million a month in the past five months, according to that document, a second document with updates from March 15 to March 20, and a