Vietcombank could lift its FOL to 35 per cent

January 13, 2022 | 13:25
Vietcombank reveals its desire to lift the bank's foreign ownership limit (FOL) to 35 per cent.
Vietcombank could lift its FOL to 35 per cent

Despite upbeat business outcomes in 2021, Vietcombank's officials continue to advocate for the State Bank of Vietnam (SBV) and the government to establish a framework to support capital and credit expansion in order to assure long-term sustainable development.

"To maintain the system's leadership position and to continue participating in the rehabilitation of weak financial organisations, it is proposed that the government and the SBV establish a special mechanism for credit growth limitations on state-owned commercial banks like Vietcombank. Moreover, state-owned commercial banks should be permitted to expand credit based on risk management," said Nguyen Thanh Tung, deputy general director in charge of Vietcombank's executive board in last week’s year-end summary meeting.

Tung also proposed that the SBV continues to foster Vietcombank's capital growth by allowing the bank to keep earnings after tax to pay dividends in shares.

Simultaneously, there should be a specific blueprint for lifting Vietcombank’s FOL restriction, which is scheduled to expand to 35 per cent in the near term.

Mizuho Bank of Japan is currently the largest foreign shareholder of Vietcombank, followed by Singapore's sovereign wealth fund, GIC Private Limited.

In early 2019, GIC purchased nearly 94,500,000 new shares of Vietcombank, equivalent to a 2.55 per cent ownership, while Mizuho purchased another almost 16,700,000 new shares to maintain its existing 15 per cent stake in the bank.

In addition, Vietcombank executives also stressed that digital transformation is a crucial and critical job for their long-term growth. All relevant departments and sectors must thus evaluate legislation governing digital data and online transactions in order to facilitate banks' digital transformation efforts.

Looking forward, the bank's total assets are expected to expand by 8 per cent in 2022 compared to the previous year. When compared to 2021, credit will grow by 12 per cent, while bad debt will be kept at less than 1.5 per cent, and profit before tax will grow by at least 12 per cent in 2022.

By Lam Tien

What the stars mean:

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