VietNamNet Bridge – The State Bank of Vietnam (SBV) is eyeing to buy GP Bank and Ocean Bank, Thoi Bao Kinh Te Sai Gon quoted its sources as saying.

Governor of the State Bank Nguyen Van Binh, in an interview on national Vietnam Television (VTV) last week, said “There would be other VNCBs”.

VNCB is the Vietnam Construction Bank, which was taken over by the central bank after it took losses for many years. The bank sold for zero dong after a shareholders’ meeting in early February.

The move by the central bank to take over VNCB would help revive the commercial bank which has undergone a mandatory restructuring process.

By saying “there would be other VNCBs”, Binh sent a signal that more commercial banks would be taken over by the State Bank.

Binh denied that the central bank violated VNCB’s right of self-determination when it forced VNCB shareholders to sell the bank at zero dong.

“This is in line with Vietnamese laws and international practice,” Binh said.

He went on to say that once VNCB’s shareholders lost their capital in an unprofitable business, they must accept “a sad ending”.

SBV needs to take over the unprofitable bank to ensure the banking system’s stability.

“VNCB will not be alone. Some other commercial banks will be dealt with this way,” Binh said.

“Some banks will merge with other institutions. Others will be taken over by the State Bank. Meanwhile, some healthy banks will admit other banks to become stronger and more powerful,” Binh said when asked about the banking sector restructuring.

The head of the central bank said he hopes SBV can deal with six to eight commercial banks this year.

The central bank shows its strong determination to push up the restructuring by stressing that it will not exclude circumstances where it has to impose extreme measures such as compulsory purchases of shares and designated M&A for some banks.

Meanwhile, a local newspaper quoted a source from SBV as saying that Ocean Bank and GP Bank would be the next banks to be sold to SBV.

The source said the takeover had been decided, but it “will take time to implement the plan”.

Of the two, GP Bank has a “special fate”. It was named as one of nine weak banks in 2012 forced to undergo compulsory restructuring. However, no institution has wanted to save it.

In early 2014, SBV revealed that GP Bank would be sold to a foreign bank and the deal would be completed within the year. However, the negotiations failed.

As for Ocean Bank, it has been undergoing difficult days after the arrest of three key managers – former chair Ha Van Tham, former CEO Nguyen Minh Thu and former deputy CEO Nguyen Van Hoan.

CV