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New banks being nipped in the bud
The Prime Minister’s decision that PetroVietnam can only make a capital contribution to one bank has forced the oil and gas group to make a choice: withdraw 10% of capital from GP Bank to pursue the plan to set up Hong Viet Bank or discard its plan to establish Hong Viet Bank to focus on GP Bank.
In December 2007, Petro Bank, now Hong Viet Bank, was licenced by the State Bank of Vietnam. The bank, with the chartered capital of VND5tril, held its first shareholders’ meeting, and members of the management board, supervision board were selected.
In 2007, PetroVietnam spent many man hours and money on the bank’s preparatory work. According to Le Xuan Ve, Head of the Personnel Department under PetroVietnam, Hong Viet Bank recruited over 100 staffs, and invited some key staffs. Several hundred billion VND was spent on office premises and the technology system.
Ve said that the bank is ready to become operational as soon as it gets a licence from the State Bank. However, he admitted PetroVietnam is still considering whether to pursue the Hong Viet Bank project, as it is now not a golden time to set up banks. Operational banks have been facing a lot of difficulties in mobilising capital, lending and providing banking services. Meanwhile, Hong Viet is an entirely brand new name, unfamiliar to clients.
Le Xuan Son, Head of the Preparatory Board for Hong Viet Bank’s establishment, said that PetroVietnam is leaning towards the solution of using Hong Viet’s capital, technology and manpower to make a capital contribution and restructure an operational bank. (Son did not say that the ‘operational bank’ is GP Bank).
If the government approves the plan, Hong Viet will hold a shareholders’ meeting to collect opinions from founding shareholders on the plan’s implementation (VIB bank, Vietnam Airlines, Hoa Phat Corporation, I.P.A finance investment company and Habeco).
Son said that some investors have sent word intimating that they would buy the invested material facilities from Hong Viet.
The fate of Hong Viet Bank remains uncertain. Meanwhile, Hoa Phat Group has asked the preparatory committee to return VND300bil of the VND400bil it contributed, explaining that it does not want the capital sitting idle in banks, while it is not sure if Hong Viet Bank will be licenced.
Ve said that PetroVietnam and Hong Viet’s founding shareholders will have a meeting next week to discuss the fate of the bank.
A project on setting up another bank (the founding shareholders are Vietnam Textile and Garment Group Vinatex, Sabeco brewery, Vietnam Steel Corporation and Vietnam Paper Corporation) has also been cancelled.
The application for setting up the bank was submitted to the State Bank in early 2008. Le Quoc An, Chairman of Vinatex, which would have contributed 12% of capital, said that the shareholders had decided to cancel the plan even if the State Bank licenced it. Luckily enough, the bank has only made procedures to get a licence, while it has not mobilised capital or made other costly moves.
In the last week, the information that Hong Viet Bank may not be established has spread among investors, causing them some discomfort.
The problem lies in the fact that options to buy Hong Viet bank shares have been selling in the OTC market for a long time despite the fact that the bank has not been licenced.
Son said that PetroVietnam’s staffs were informed that they would be able to purchase shares of Hong Viet depending on their length of service. Now the staffs have the right to join the capital contribution to an operational bank as PetroVietnam is planning, or take the capital back. PetroVietnam will not take responsibility for the options transacted on the OTC market.
VNN
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