Foreign investors cannot hold more than 30% of shares in banks that have government ownership of above 50%
[HANOI] Vietnam’s government is allowing 49 per cent foreign ownership of a handful of banks – up from 30 per cent – that have taken over struggling financial institutions, in a move to quicken the central bank’s restructuring of troubled lenders.
The new decree will go into effect May 19, according to a statement on the government’s website.
“This will enable some banks to get more foreign investment and find overseas strategic partners,” said Tran Tuan Minh, chief executive officer of TVI, a Hanoi-based equity research and investment firm. “It will also encourage foreign investors to join the restructuring process of weak banks.”
The State Bank of Vietnam in January announced the transfer of two distressed banks: Global Petroleum Bank, known as GPBank, to Vietnam Prosperity Joint Stock Commercial Bank, or VPBank; and DongA Bank to Ho Chi Minh Development Joint Stock Commercial Bank, or HDBank. The central bank said the transfers were part of the regulator’s overhaul of weak domestic banks.
GPBank and DongA Bank are now 100 per cent owned, respectively, by VPBank and HDBank.
Two other distressed lenders were transfered to other banks last year. Bank for Foreign Trade of Vietnam, or Vietcombank, took over Ocean Bank. Military Commercial Joint Stock Bank absorbed Construction Bank.
Foreign investors cannot hold more than 30 per cent of shares in banks that have government ownership of above 50 per cent, according to the statement. BLOOMBERG
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