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Bao Viet Bank debuts during ban on new banks
Bao Viet Bank, a subsidiary of the nation’s leading insurer Bao Viet Group, will be launched in early January, becoming Vienam’s 39 th joint stock commercial bank.
Prime Minister Nguyen Tan Dung approved the establishment of Bao Viet Bank in October, nearly two months after the State Bank of Vietnam had announced it would stop licensing new privately-owned banks to ensure the health of the nation’s banking system – and pending changes to bank establishment regulations.
The new Hanoi-based bank will open with a charter capital of 1.5 trillion VND (90.36 million USD) and with the CMC Corporation and Vinamilk holding significant minority interests in the new bank, at 9.9 percent and 8 percent, respectively.
Bao Viet Group general director Nguyen Thi Phuc Lam said that Bao Viet Bank was ready to go forward after a long period of preparation and that the opening ceremony would be held on Jan. 9.
At the Vietnam Business Forum earlier this month, the working group on banking expressed concerns about the large number of banks in Vietnam , explaining that too many small players would create an inefficiency of scale, costs and professional skills.
However, State Bank deputy governor Nguyen Van Binh said that defining “how many banks are too many or too few” was difficult and that was most important was the quality of their banking business.
By the middle of the year, the central bank had received 20 applications to establish new banks, but Bao Viet Bank has become only the third to be approved for a licence, after Lien Viet Bank and Tien Phong Bank.
Vietnam ’s banking system now includes five State-owned commercial banks, six joint-venture banks, 38 private commercial banks, 44 branches of foreign banks, 10 financial companies, 13 financial leasing companies and 998 people’s credit funds.
VNA
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