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Weak banks strive to attract foreign investors
Prime Minister Nguyen Tan Dung has approved a plan to restructure credit institutions by 2015 which includes permission for foreign banks to acquire higher stakes in weak lenders.
The current limit is 20 per cent for a strategic foreign partner and 30 per cent for foreign investors.
Sumit Dutta, CEO of HSBC Viet Nam, is sure many more foreign investors will be interested in buying into small banks if they are allowed a dominant, or even 100 per cent, stake. They will want a say in running the business and other aspects like human resources and policymaking, he explains.
He believes that with their experience and advanced technologies, foreign investors will be able to improve the banks' efficiency.
But the first thing to do to attract foreign investment in domestic banks, he says, is to improve their transparency so that prospective investors will thoroughly understand the health of each bank and feel more secure about putting in money.
Deputy chairman of the National Commission for Financial Supervision, Le Xuan Nghia, however thinks it is not easy for weak banks to sell stakes to foreign investors because of their bad-debts problem.
There are some banks whose bad debts surpass their capital, so there is no way foreign banks will purchase them, he says. In such cases elsewhere in the world, the government buys a dominant share in the bank, turns them around, and then sells them to investors.
Nguyen Xuan Minh, CEO and general director of the Viet Nam Asset Management, has a different view, telling the Sai Gon Economic Times foreign banks might pay attention to factors like networks and clientele, and not just the figures in their books.
vietnamnews
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