VietNamNet Bridge - The Prime Minister has agreed to raise the ceiling on the foreign-ownership ratio in Vietnamese commercial banks from 30 percent now to “over 30 percent”. However, specific figures were not released.

 

The State Bank approved a deal for SCB to sell 142.5 million shares, or 9.9 percent of its chartered capital, to Noble Capital Group Limited, and 47.5 million shares, or 3.3 percent of chartered capital, to Glory Capital Investment Limited Place of Incorporation.

The deal was one of very few in the last three years in which foreign investors bought shares in Vietnamese commercial banks.

Both buyers are institutional investors from the UK. The total value of the deal is VND1.9 trillion. 

SCB’s total assets reached VND242.223 trillion by the end of the last year, while the bank plans to raise the figure to VND322.053 trillion this year. The bank said that it is still looking for foreign strategic investors.

And if the government accepts to raise the ceiling for foreign ownership to 49 percent as hoped, SCB will have more opportunities to welcome foreign shareholders.

“The Prime Minister has instructed the State Bank and relevant ministries to amend the current laws to raise the ceiling foreign ownership ratio in commercial banks,” said Nguyen Van Nen, chair of the Government Office at a press conference in late April.

Commenting about the decision, a banker said it is now “high time” for Vietnam to raise the ceiling foreign ownership ratio in banks.

He said offering more room to foreign investors will be the best medicine for Vietnam to call for foreign cash to restructure its banks and settle bad debts.

The existing foreign shareholders in some Vietnamese commercial banks, such as French Société Générale in SeaBank, Japanese Sumitomo Mitsui Banking Corporation in Eximbank, French BNP Paribas in Orient Bank, Malaysian MayBank in An Binh Bank, have expressed their willingness to buy more bank shares if they are allowed.

A US financial institution is reportedly negotiating with a HCM City-based commercial bank to buy the bank’s stakes.

Nguyen Tri Hieu, a renowned banking expert, noted that many Vietnamese commercial banks plan to sell their stakes to foreign partners, such as BIDV, HDBank, Military Bank, SHB and Sacombank. However, no new deal has been made over the last three years.

Hieu said that the low ownership ratio offered to foreign investors caused the investors to lose interest in Vietnamese banks. The Military Bank, for example, plans to sell 10-15 percent, while HD Bank and SHB have not revealed the percent of stakes they want to sell.

Kim Chi