Saturday, 12/09/2015 14:44

How much room is available for foreign investors in Vietnamese banks?

While the government of Vietnam has opened the door widely to foreign investors in many business fields, it remains very cautious with the banking sector.

Under current laws, one foreign investor can hold no more than 20 percent of stake of one Vietnamese bank, while the total foreign ownership in one bank must not be higher than 30 percent.

The proportions are believed to be unattractive to foreign investors, because with the low ownership ratios, foreign investors’ rights to make decisions relating to banks’ business remain limited.

VietinBank’s CEO Le Duc Tho has confirmed the bank is seeking the State Bank of Vietnam’s permission to raise the foreign ownership ratio to 30-35 percent or even 40 percent.

ABBank has sold 30 percent of its stake to foreign investors – MayBank which holds 20 percent shares and IFC which holds 10 percent. The bank plans to ask for the government’s nod to sell up to 49 percent of shares to foreign investors.

After selling 15 percent of stake to foreign investors to raise chartered capital to VND14.294 trillion earlier this year, SCB is now trying to call for more foreign capital to raise chartered capital further to VND15.294 trillion.

The bank is also considering offering more room to foreign investors in the future, if this is approved by the government and the central bank.

Dau Tu Chung Khoan quoted some bankers as saying that they are looking for foreign partners during the restructuring process, and that they will not only sell 30 percent of stake.

After selling 49 percent of stake in HDFinance, a finance subsidiary, to Credit Saison Group from Japan, HDBank is now considering selling its shares to foreign investors.

HDBank’s chair Le Thi Bang Tam said the bank was negotiating with foreign investors from Europe, the US and Japan. Meanwhile, opinions from well informed circles said HDBank may sell its stake to a Japanese investor.

While agreeing that selling more stakes to foreign investors is inevitable, bankers and analysts still disagree about the new ceiling on foreign ownership in banks.

Tri Thuc Tre quoted a senior executive of the Saigon Commercial Bank (SCB) as saying that SCB got the government’s approval in principle to its plan to sell over 51 percent of stake to foreign investors.

This was a part of the plan on bank restructuring submitted to the government. At present, a foreign shareholder holds 14.5 percent SCB’s shares.

Truong Van Phuoc, deputy chair of the National Finance Supervisory Council, does not think a common foreign ownership ratio ceiling should be applied to all banks.

“Who to sell shares to and how much to sell will depend on the conditions of each bank,” Phuoc said.

vietnamnet
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