Vietnam banks see more withdrawals of foreign shareholders

Standard Chartered is no longer a shareholder of ACB. Standard Chartered (Hong Kong) and Standard Chartered (UK) have divested 64.2 million (6.25 percent of total capital) and 89.86 million ACB shares (8.75 percent). All the transactions were completed on January 9.

Prior to that, BNP Paribas, the foreign shareholder of Orient Bank, in late 2017 divested all of its OCB shares, equal to 18.68 percent of chartered capital. However, there still has not been any information about the buyers.

Some other foreign investors also took leave of Vietnamese banks in recent years. HSBC, which was the biggest shareholder in Techcombank with 20 percent of shares, divested from the bank in 2017.

VP Bank, after saying goodbye to OCBC in 2013, has been operating as a 100 percent Vietnamese owned bank since then. Sacombank now also doesn’t have foreign investors after ANZ left Sacombank in 2012.

A senior executive of VP Bank denied the fact that there existed cultural dissimilarities between Vietnamese and foreign managers. Instead, there were differences in the view about business strategy. 

He said the leadership of the bank realized that the presence of the foreign partner did not bring the effects as designed and it decided to develop the bank.

The banker believes there are many ways to Rome and the presence or absence of foreign partners is not the decisive factor. 

Instead of choosing foreign strategic partners who may not share the same viewpoints and business philosophy, VP Bank has decided to choose ‘foreign experience’. Half of the members of the board of management are foreign executives.

A representative of a joint stock bank said foreign investors have their purposes when making investments in Vietnam banks. They either seek profit, want to polish their image, or try to penetrate the Vietnamese market. And when they withdraw capital, this means that they either have achieved one of the goals, or they have realized that the goals are unreachable. 

He went on to say that the macroeconomic environment has witnessed big changes for many years, which has forced everyone to develop new business strategies as the old ones are no longer reasonable.

Andrew Colin Vallis from Standard Chartered said the foreign bank gave big support to ACB in the past, but it is no longer necessary. 

The limited foreign ownership ratio of 30 percent in one Vietnam bank could also be a reason behind the leave, because with a low ownership ratio, they cannot have a decisive voice in the banks’ operation.

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Thanh Lich