The plan would nationalize weak banks, whereby banks would have to be sold to SBV for zero dong. This has already happened with two banks – the Vietnam Construction Bank and Ocean Bank.

“Zero dong” is applied as a last resort, when weak banks cannot find any other solution to restructure themselves.

Analysts have every reason to believe that GPBank will be the next bank named by the State Bank, which announced earlier this year that 2015 will be the right time for it to intervene in bank restructuring. Under this scenario, weak banks must finish their restructuring this year or be dissolved.

It appears that the central bank has taken the first steps to implement its zero dong plan. It has released a decision to suspend the rights and obligations of the three members of GPBank’s board of directors and has appointed GPBank’s representative.

The three members include Ta Ba Long, GPBank’s chair of board of directors, Doan Van An, deputy chair, and Ta Thu Thuy, member of the board of directors. Meanwhile, Tran Thi Le Nga, head of the supervision board from VietinBank, one of the largest Vietnamese commercial banks, has been appointed as the legal representative of GPBank, starting from April 8.

GPBank is one of nine weak banks which SBV was told to undergo a compulsory restructuring process. While the other eight banks have found solutions, GPBank still has not “seen the light at the end of the tunnel”.

Sources said GPBank once struggled hard to avoid the zero dong plan. Pham Quyet Thang, CEO of GPBank, during an interview with local newspapers some months ago, said that many domestic and foreign investors had showed interest in GPBank, which, in their eyes, was a bank with stable fundamentals. They said they planned to inject money into the bank.

If GPBank has investors who could save the bank, GP would be able to avoid the zero dong scenario.

Thang’s strong determination caused people at the time to think that a ‘happy ending’ would occur.

However, what the central bank has done shows that the expected scenario will not happen. 

Analysts have predicted that the announcement to nationalize GPBank will be released by SBV at the bank’s upcoming shareholders’ meeting.

GPBank’s depositors have been reassured that no matter how GPBank is treated, their benefits will be guaranteed by the State.

Dat Viet