Foreign stakes to rise in ‘weak' Vietnamese banks

The State Bank of Viet Nam may increase the limit on foreign ownership in ‘weak' banks.

Existing government regulations in Decree No 69/2007/ND-CP stipulate that the total foreign ownership in a domestic commercial bank may not exceed 30 per cent of the bank's charter capital.

State Bank of Viet Nam Governor Nguyen Van Binh said that the central bank has submitted to the Government a draft decree that would lift this limit for weaker banks, while increasing the limit on ownership of a single foreign strategic shareholder in any other bank from 15 per cent to 20 per cent.

"To attract foreign investors, especially foreign banks with strong financial capacity and experience to participate in the process of restructuring the domestic banking system, the draft decree would allow foreign investors to own over 30 per cent of equity in weak banks undergoing restructuring process, depending on specific cases," Binh said.

With the nation's stock market in a long-term slump, the Government has heard repeated calls to expand the space for foreign investors to invest in Vietnamese companies, including banks.

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