Vietnam finalises valuation of three banks for mandatory acquisition

May 21, 2024 | 19:35
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The Vietnamese government has completed the valuation of three banks for mandatory acquisition, with plans to present the proposal for approval in May, aiming to finalise the process by the end of the year.
Vietnam finalises valuation of three banks for mandatory acquisition

On May 20, Deputy Prime Minister Le Minh Khai reported on the socioeconomic situation during the opening session of the seventh session of the 15th National Assembly.

According to the DPM, the economy remained stable in the first four months of the year, with inflation under control. GDP growth in the first quarter reached 5.66 per cent, the highest in three years, and the economy's scale reached $430 billion, placing Vietnam among upper-middle-income countries.

The average consumer price index (CPI) increased by 3.93 per cent on-year. Realised foreign direct investment reached $6.28 billion, up 7.4 per cent, marking the highest growth in five years. Several major corporations have committed to investing in Vietnam in sectors such as electronics, chips, semiconductors, and renewable energy.

Among the four weak banks under the special control of the State Bank of Vietnam (SBV), three banks - Construction Bank, OceanBank, and Global Petroleum Bank - will be transferred to other banks through mandatory acquisition, while DongABank remains under special control. Last year, the SBV received approval from authorities to proceed with the mandatory acquisition of these three banks and DongABank.

In April, Pham Nhu Anh, CEO of Military Bank, announced that the plan to acquire a weak bank had been submitted to the SBV for government approval. Military Bank aims to finalise this acquisition by this year or 2025 to "open up new growth opportunities, particularly in credit expansion."

Regarding other weak banks awaiting restructuring approval, DPM Khai noted that Vietnam Development Bank has been restructured, reducing its accumulated losses by 20 per cent and lowering bad debts by 37.7 per cent, approximately $625 million, by the end of April.

However, Vu Hong Thanh, Chairman of the National Assembly Economic Committee, highlighted ongoing concerns about cross-ownership, manipulation, and group interests in the banking sector.

The handling of weak credit institutions and stalled projects remains challenging.

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By Tri Lam

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