Vietnam cbank mulls acquiring GP.Bank, Ocean Bank following construction bank buyout

March 06, 2015 | 14:19

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The State Bank of Vietnam (SBV) is considering taking over other loss-making local financial institutions including the unlisted GP.Bank and Ocean Bank, according to Deputy Governor Nguyen Phuoc Thanh.

GP.Bank, which was said to have a 100 percent stake sold to a foreign bank by the end of last year, may be the next bank to be bought by the SBV following the acquisition of Vietnam Construction Joint Stock Commercial Bank (VNCB) at VND0 (zero) last month, the government website chinhphu.vn quoted Thanh as saying.

In the case of Ocean Bank, the central bank has required a third party to audit its assets, he said.

"If the audit reveals that Ocean Bank has negative capital, the central bank will have no choice but to take over it as we have already done to VNCB,” he said.

If GPBank and Ocean Bank are unable to raise capital to make up for their losses, the SBV will step in and take them over, according tochinhphu.vn.

Regarding the possible merger between Eximbank and Nam A Bank, Thanh said the central bank advocates consolidation to merge the two banks together.

“This unity is a very good thing, because by 2018 Vietnam's banking system will have only about 20 banks,” Thanh said.

According to banking experts, recent SBV moves to buy out loss-making banks are the right choice.

These moves followed SBV Governor Nguyen Van Binh’s bold statement at a conference in Hanoi on January 17 that the first half of 2015 will be the peak time for a restructuring scheme, resulting in more mergers and acquisitions in the banking sector.

The SBV has already set a target to firmly deal with weak banks with dim prospects of recovery and development, even forcing them to dissolve or go bankrupt.

The same idea was shared by Prime Minister Nguyen Tan Dung in a government meeting in Hanoi in late August last year, chinhphu.vnreported.

On February 3, the SBV asked Vietcombank, the fourth biggest bank in Vietnam by assets with VND530.22 trillion (US$24.9 million), to manage and operate loss-making VNCB after the central bank took it over one day earlier.

The central bank announced that it had become the new owner after acquiring a 100 percent stake in VNCB, terminating all rights and interests of the latter's shareholders following their failure to supplement more funds to ensure the real value of the bank’s minimum charter capital of VND3 trillion.

Police from the Ministry of Public Security on January 28 arrested Nguyen Minh Thu, former general director of Ocean Bank, for her alleged involvement in an unlawful lending instance uncovered at the bank late last year.

The arrest of Thu, 42, was the next step in an investigation into the "violation of regulations on the lending activities of credit institutions" occurring at the Hanoi-based bank, according to police.

Thu had been the chief executive officer of Ocean Bank and a member of its board of directors since 2011.

She was elected the bank’s chairperson to replace Ha Van Tham, former chairman and founder of Ocean Bank, in late October 2014. Thu resigned after two months in power.

Nguyen Van Hoan, 38, who is also the founder of the bank’s lending council, and Tham, 43, were arrested on December 22, 2014 and October 24, 2014, respectively, on charges of breaching lending regulations pursuant to Article 179 of the Penal Code, police officers said.

The SBV said it had found Tham committing many serious illegal acts during the implementation of a project to re-organize credit organizations.

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