Vietnam seeks more foreign ownership in banks acquiring weaker lenders

The current cap on foreign ownership is 30%, but that could change if the decree drafted by the State Bank of Vietnam is approved.

The government has directed Vietnam’s stronger financial institutions to take over weaker ones and DongABank, CB, OceanBank and GPBank have been classified as “weak” lenders in need of restructuring.

To date, four lenders — Vietcombank, MB, HDBank and VPBank — have revealed plans to acquire their struggling competitors.

At an annual shareholder meeting in late April, Vietcombank chairman Pham Quang Dung said the bank plans to acquire a weak bank in line with the central bank’s plan.

MB bank has announced that it intends to acquire OceanBank for zero dong.

An MB executive noted that the failing institution accounts for less than 10% of MB’s total assets, and its accumulated losses are no more than VND20 trillion (some $806.45 million).

“Cooperating with this bank (OceanBank) is both a political task and an opportunity for MB,” said MB Vice Chairman Luu Trung Thai at OceanBank’s 2022 business conference early this year.

According to a State Bank roadmap approved by the government, MB will coordinate with OceanBank to develop an acquisition plan and submit it to the government for approval.

HDBank shareholders also approved a plan to acquire a weaker lender for zero dong in August.

HDBank general director Pham Quoc Thanh has said the bank is prepared for the acquisition.

VPBank has not yet consulted with shareholders on acquiring a struggling bank yet, but its chairman Ngo Chi Dung has reported that his team is definitely considering an acquisition.

As of September 30, Vietnam had nine foreign banks, four state-owned banks and 31 joint stock banks, according to a statement posted on the central bank’s website.