return icon Vietnamnet.vn

Cross ownership a big headache in banking: MPI

VietNamNet Bridge – Cross ownerships among banks are still beyond control and complicate the process of tacking bad debts, said the Ministry of Planning and Investment (MPI) in a report sent to the Government’s monthly meeting three days ago.

VietNamNet Bridge – Cross ownerships among banks are still beyond control and complicate the process of tacking bad debts, said the Ministry of Planning and Investment (MPI) in a report sent to the Government’s monthly meeting three days ago.



{keywords}

 

 

In its report, MPI said cross ownerships in the banking industry were rather sophisticated and too difficult to be made transparent, hindering the economic restructuring process.

The report mentions many forms of cross ownership, including between banks, and between banks and enterprises, with a group of major shareholders holding big stakes in both banks and enterprises, “creating a labyrinth of cross ownership ties that are complicated, sophisticated and uncontrollable.”

The ministry therefore observed that the process of tackling bad debts has merely begun, and the amount of non-performing loans can still grow further.

The warning by MPI is in sync with reports delivered by the National Assembly’s Economic Commission at the Autumn Economic Forum in Hue City last week, which described such cross ownerships as a matrix and at an alarming level.

Such cross relationships have been formed among State-owned commercial banks, joint-stock banks, foreign banks, finance funds, State-owned enterprises and private businesses.

The ownership by State-owned banks at joint stock banks alone poses a big problem. For example, Vietcombank as of end-2011 held an 11% stake in Military Bank, 8.2% in Eximbank, 4.7% in Orient Bank, and 5.3% in Saigon Bank. The NA report said by then there were eight joint-stock banks having ownership relationship with four State-owned banks.

Cross ownerships among joint-stock banks are also rampant, with at least six banks having other banks as stakeholders. Eximbank, for example, has a stake of 10.6% in Sacombank and 8.5% in Viet A Bank.

State conglomerates and private corporations also hold stakes in banks. By the end of 2011, there were some 40 corporations holding a stake of at least 5% in joint-stock banks. Furthermore, most State conglomerates have established finance companies of their own.

The relationship between banks and private companies is also difficult to monitor. There are banks owned by family-run companies or by members of same families, who are also top executives at private companies.

Banks themselves also have their own affiliates in areas of securities, real estate, financial investment, and insurance. Data collected from four State-owned banks and eight joint-stock banks shows that 11 out of these 12 lenders have established securities offshoots, eight out of the 12 have set up financial investment firms or fund management firms, nine with subsidiaries in real estates, and five with stakes in insurance companies.

Source: SGT

MORE NEWS

Central bank not tighten real estate credit: Deputy Governor

The State Bank of Vietnam (SBV) has never issued any documents or statements ordering credit for real estate be tightened, Deputy Governor Dao Minh Tu said on February 8.

Vietnamese Prime Minister starts official visit to Singapore

Prime Minister Pham Minh Chinh, his spouse, and a high-ranking Vietnamese delegation arrived in Changi Airport on February 8 afternoon, starting a three-day official visit to Singapore.

Businesses discuss ways to overcome challenges in 2023

Warned that uncertainties will still exist in 2023, businesses need to prepare well to weather the storm.

Vietnam's bond market remains quiet this year

The scale of debt in the corporate bond market is less than 15 per cent of GDP.

Organ trafficking in Vietnam driven by high demand, low rate of donation: experts

A conference on organ donation registration and the prevention of human organ and tissue trafficking was held on Monday.

VCCI proposes allowing businesses to set fuel retail prices

The Vietnam Chamber of Commerce and Industry (VCCI) has written to the Government suggesting fuel retail prices be decided by businesses based on supply and demand to prevent fuel shortages.

VIETNAM NEWS HEADLINES FEBRUARY 8/2023

Vietnam puts children at centre of development policies, strategies: Ambassador

Gov’t issues action plan to realize Hanoi’s development vision until 2045

The Government has issued an action plan to realize Politburo’s resolution on the objectives for Hanoi’s development until 2030, with a vision to 2045.

Commercial sidewalk use may be charged by HCMC authorities

HCMC is planning to allow the paid use of sidewalks for commercial purposes such as vending goods or parking if these business activities leave a space of at least 1.5 meters wide for pedestrians.

CAAV advises caution when buying air tickets

The Civil Aviation Authority of Viet Nam (CAAV) has received feedback on the fact that passengers have to buy air tickets higher than the specified prices on domestic routes, especially during the peak of the Lunar New Year (Tet).

Prime Minister leaves Hanoi for official visits to Singapore, Brunei

Prime Minister Pham Minh Chinh, his spouse and a high-ranking delegation of Vietnam left Hanoi at noon on February 8 for official visits to Singapore and Brunei from February 8-11.

US war veteran wishing to return wartime diary to Vietnamese family

Pater Mathews, a US war veteran, has emailed relevant agencies of Ha Tinh province, central Vietnam, expressing his desire to fly to Vietnam and return a Vietnamese martyr’s diary he came across decades ago to the martyr’s family.

VIETNAM BUSINESS NEWS FEBRUARY 8/2023

January payment transactions via national public service portal valued at 11.8 mln USD

Vietnam needs new products, services to reach tourism targets

To realise the targets of attracting 110 million tourists and earning some 650 trillion VND (27.5 billion USD) in revenue this year, Vietnam is recommended to develop more products and services to offer new experiences to visitors.

PM Chinh’s Singapore visit expected to advance bilateral trade ties

Prime Minister Pham Minh Chinh’s Singapore visit from February 8-10 aims to affirm the determination to elevate the bilateral economic ties to a new height in the context of many free trade agreement (FTAs) coming into force.
back_to_top