Ocean Bank finds new foreign owner

June 24, 2017 | 16:29

(0) user say

A source of VIR revealed that the zero VND Ocean Commercial Joint Stock Bank (Ocean Bank) has been sold to a foreign bank in Asia.

Still coming to terms with the rampage of former chairman Ha Van Tham and colleagues, Ocean Bank finds new way forward

RELATED CONTENTS:
	SBV should offer failing banks to foreign investors
	Bank chairman admits violations

Although the buyers identity was undisclosed, the private source confirmed that the two sides are finishing the paper works.

One Member Limited Liability Global Petroleum Bank (GPBank ), another zero VND bank, may be sold to a consortium of a foreign financial institution and an investment and real estate development company.

The last zero VND bank, Vietnam Construction Bank (CBBank), is said to be implementing its restructuring plan before merging with a domestic bank.

Besides, DongA Joint Stock Commercial Bank (DongA Bank) is said to be merging with Ho Chi Minh City Housing Development Bank (HDBank).

At a press conference at the beginning of 2017, Nguyen Van Hung, deputy chief inspector of the State Bank of Vietnam’s Inspection and Supervision Agency, said that there would be solutions to address the five weak commercial banks, including three banks acquired by SBV for zero VND (CBBank, Ocean Bank, GPBank), DongA Bank, and Saigon Joint Stock Commercial Bank (Sacombank).

“Although these banks’ operating activities have been improved to avoid the collapse of the whole banking system, they need a complete overhaul,” Hung said.

Between the end of 2015 and October 2016, the bad debts of the three zero VND commercial banks declined by about 8 per cent. Of the total, the bad debts of Ocean Bank and GPBank significantly decreased. GPBank and CBBank’s outstanding loan balance for enterprises and individuals decreased dramatically. In addition, CBBank’s deposits even increased between the end of 2015 and November 2016 by nearly 14 per cent.

At the 2017 conference on implementing plans for Ocean Bank, Do Thanh Son, chairman of Ocean Bank, said that in 2015 and 2016 the bank continuously reported profit, which partially covered its losses accumulated in the past.

In 2017, Ocean Bank targets to receive more than VND30 trillion ($1.2 billion) in deposits and to report an outstanding loan balance of nearly VND18 trillion ($720 million).

In February 2017, Ha Van Tham, former chairman of Ocean Bank, and 47 other former leaders and employees of the bank were tried for charges including breaching the regulations on loans of credit institutions, abusing their positions and power while on duty, and intentionally acting against the state’s laws on economic management, causing serious financial loss in the period before 2014.

The Ocean Bank case is one of the six biggest economic crimes that the Central Anti-Corruption Steering Committee was asked to bring to trial. In the trial, Tham admitted to misconduct and said his actions were caused by a need to complete his quota and avoid being dismissed. He asked the court to reduce the legal responsibilities of his accomplices because they were forced to adapt to the difficult circumstances at the time.

According to the indictment of the People’s Procuracy, Ha Van Tham, as Ocean Bank’s chairman at the time, directed his employees to approve Pham Cong Danh’s borrowings. Pham Cong Danh was the former chairman of Vietnam Construction Joint Stock Commercial Bank. He took up significant loans from Ocean Bank through Trung Dung Company without meeting the bank’s prescribed requirements and did not submit collateral. By lending to Danh, Ha Van Tham violated lending procedures, causing a loss of VND350 billion ($14 million) for Ocean Bank.

Besides, Nguyen Xuan Son, who was the bank’s general director and the representative of Vietnam National Oil and Gas Group (PetroVietnam) capital contribution to the bank, had worked with Tham to illegally pay interest outside deposit contracts to customers, which caused a loss of nearly VND69 billion ($2.8 million) to the bank.

A wide range of employees involved committed extremely serious violations in lending, mobilising deposits, and paying customers higher interest rates than the ceiling regulated by the central bank.

In total, through their rampage of violations, Ha Van Tham and his employees caused a loss of nearly VND2 trillion ($80 million) to the bank, affecting the central bank’s monetary market management policy and hindering the implementation of the state’s monetary policy.

By By Nhue Man

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional