Vietnam’s government announced that certain private banks can increase foreign ownership to 49% from 30%. This is allowed after they acquired struggling financial institutions as part of the government’s banking system restructuring plan.
The government didn’t name the eligible banks in the statement on its website. However, they clarified that this exemption doesn’t apply to state-owned commercial banks.
The decree, expected to take effect from May 19, states, “Total foreign investors’ ownership in a commercial bank that compulsorily received a distressed rival may exceed 30% but not exceed 49% of its charter capital.”
In January, the State Bank of Vietnam directed two commercial banks to take over underperforming rivals. The central bank said this restructuring drive was “necessary for political stability and social order.”
VPBank took over GPBank, and HDBank took over DongA Bank.
In October of last year, MBBank took over Ocean Bank, and Vietcombank took over Construction Bank, all as part of the central bank’s restructuring effort.
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