Investors are left in limbo

May 02, 2007 | 18:12
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Foreign investors wanting to take a strategic partnership in a joint-stock commercial bank will have to wait a few more months for approval from the government, due to a lack of clear criteria for such acquisitions.

Local operations are proving a tempting foreign target
Government decree 69/2007/ ND-CP dated April 20, which regulates the acquisition of stakes in unlisted joint-stock commercial banks by foreign investors, states that foreign strategic investors cannot hold more than 15 per cent of the bank’s chartered capital. This is 5 per cent less than provided for in the draft decree, but the government will allow 20 per cent stakes on a case-by-case basis.
The State Bank of Vietnam will have to issue a circular to define its criteria, but there is no fixed deadline for the circular.
“I don’t have any idea about the definition of particular cases, as I have not received any direction from central bank’s leaders or the government on the issue,” said an official from the central bank’s Banks and Non-bank Credit Institutions Department.
Meanwhile, a Government Office source said that the government had assigned the central bank to provide guidelines to the implementation of the decree.
“The decree definitely affects those foreign investors who are planning to buy more than a 15 per cent stake in a bank,” the bank official said.
At present, the impasse affects high-profile foreign banks such as HSBC, Citibank, OCBC, BNP Paribas, Deutsche Bank and UOB. These banks have planned to acquire 20 per cent stakes to become strategic partners in Techcombank, EAB, VP Bank, OCB, Habubank and Southern Bank respectively. Previously, the cap on stakeholdings by a single foreign institution is 10 per cent.
HSBC and Techcombank in February requested a special mechanism to double HSBC’s stake in Techcombank to 20 per cent for a consideration of $71.5 million. The foreign bank purchased a 10 per cent stake in Techcombank two years ago.
Le Dac Son, director of VP Bank, said the bank was seeking to sell an additional 10 per cent stake to its current strategic partner.
“We will consider the issue next year, provided the general shareholders meeting’s approval. However, the new cap is not our concern,” Son said.
OCBC in 2005 signed a memorandum of understanding with VP Bank to acquire a 10 per cent stake in the latter, in a $15.7 million deal. VP Bank planned to raise its chartered capital to VND2.2 trillion this year and VND3 trillion in 2008.
Earlier, UK-based rival Standard Chartered Plc. paid $22 million for 8.56 per cent of Asia Commercial Bank (ACB), and ANZ Banking Group Ltd paid $27 million for 10 per cent of the Saigon Thuong Tin Commercial Bank (Sacombank).
Vietnam’s largest semi-private bank by capital, HSBC also paid $17.3 million for its 10 per cent stake in Techcombank.

By Van Anh

vir.com.vn

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