SBV pushes on with bank restructuring

 
 SBV to create favourable conditions for foreign credit institutions

The SBV has given its approval to the restructuring plans of 11 out of 25 commercial banks. Aside from the previous nine weak banks, the SBV said they have discovered two more banks and six credit institutions that are considered weak.

According to the governor, eight out of nine weak banks have completed the first stage of the restructuring process. Meanwhile, one foreign bank that wants to buy controlling share in a weak bank, is waiting for directives from the Prime Minister in order to carry out the purchase.

Rumour has it that the weak banks could be GP Bank, since the Singaporean United Oversea Bank expressed its desire to buy GP Bank's stakes in September.

Binh said they would create favourable conditions to encourage foreign credit institutions to buy or contribute capital to help Vietnamese banks go through the restructuring process, especially weak banks. They proposed a set of regulations addressing this issue which state that foreign credit institutions can own over 20% of the charter capital of a domestic.

The SBV has directed the restructuring process of joint venture banks and cooperation in the banking sector between Vietnam and other countries. The SBV also reported to the Prime Minister and asked for instructions on how to deal with two joint venture banks, Viet Thai and VID Public. These two banks did not insure their regulated charter capital.

Binh further said the restructuring process was mandatory for weak banks in 2012, but it is voluntary this year. Despite the difficulties, the credit institutions still managed to improve their finances. In the first months of 2013, assets of the whole system jumped by 5.67% compared to same period last year.