The State Bank of Viet Nam (SBV) has acquired all the equity of the Vietnam Construction Joint Stock Commercial Bank (VNCB).
The development took place following a decision taken by Governor Nguyen Van Binh on March 5.
Asthe central bank had stated a month ago, stakes have been transferredat the price of zero dong per share, and the acquisition is compulsoryto restore the VNCB's payment ability in line with the general effortsto create a healthier banking system.
Following the takeover bySBV, the construction bank is now a one-member limited company with acharter capital of 3 trillion VND (142.86 million USD). This terminatesall statuses, including the rights and interests, of existingshareholders in the bank.
The new institution made its debut inHo Chi Minh City on March 5, when Vietcombank Deputy General DirectorNguyen Van Tuan was reported to have resigned from his post to becomethe Chairman of VNCB, as appointed by the central bank.
SBVofficials believe the participation of the State-run Vietcombank, one ofthe major lenders in Vietnam, will help the fragile bank succeed in itsrestructuring schemes and assure the public of its more efficient andsecure business performance.
VNCB General Director Dam Minh Duc will continue to hold his position.
TheGovernment has placed the VNCB under special supervision since the bankhas shown significant weakness, and some of its former top executiveswere arrested for an alleged violation of State regulations.
Theauthorities decided on the acquisition in February after the bank failedto present a plan to assure its minimum equity required by the law inlate January.
The SBV said it will now coordinate with relevantagencies to develop the new institution, which inherits all the legalrights and responsibilities of the former organisation.
“With therole of the SBV and the collaboration of ministries and sectors, alongwith the close direction provided by the Government, the restructuringof the VNCB will achieve its targeted goals," the central bank said in anews release.
At a February meeting, the VNCB's management boardsaid the changes would offer a turning point for new opportunities in2015, during which it expects profitability and would work towardsstrengthening the foundations for multi-function operations in thefuture.
"Detailed schemes and measures have been well preparedfor the VNCB's forthcoming business activities," the bank stated on itswebsite. SBV officials said last week that the GP.Bank and Ocean Bankmight also be nationalised.
The VNCB needs 40 trillion VND (1.9billion USD) to restructure its operations, said Deputy Governor of theState Bank of Vietnam Nguyen Phuoc Thanh.
Speaking with localmedia at the ceremony to announce the change of VNCB's operating modelinto a one-member limited company, Thanh said the capital will come fromvarious sources, including the VNCB's sale of bad debts for the VietnamAsset Management Company and the SBV's refinancing loan.
Thanhnoted that with the SBV's ownership, people will feel more secure whentransferring their money to the bank. Meanwhile, several major banksalso promised to support the VNCB by sending the bank their money. Thus,the VNCB would receive the capital it needs for its operations.
TheVNCB was established by Trust Bank in May 2013. Trust Bank wasoperational for 23 years, with charter capital of 3 trillion VND (142.85million USD). In mid-2014, the SBV appointed new officials to the VNCBafter some former top executives at the bank were arrested for allegedlyviolating state regulations.
The VNCB, which is set to berestructured, signed a comprehensive cooperation agreement withVietcombank to facilitate growth and sustainability last August.
Accordingto the central bank, its takeover of the VNCB will terminate allstatuses, including the rights and interests of existing shareholders inthe construction bank. However, the legal rights and interests ofdepositors at the bank will be preserved.-VNA
The development took place following a decision taken by Governor Nguyen Van Binh on March 5.
Asthe central bank had stated a month ago, stakes have been transferredat the price of zero dong per share, and the acquisition is compulsoryto restore the VNCB's payment ability in line with the general effortsto create a healthier banking system.
Following the takeover bySBV, the construction bank is now a one-member limited company with acharter capital of 3 trillion VND (142.86 million USD). This terminatesall statuses, including the rights and interests, of existingshareholders in the bank.
The new institution made its debut inHo Chi Minh City on March 5, when Vietcombank Deputy General DirectorNguyen Van Tuan was reported to have resigned from his post to becomethe Chairman of VNCB, as appointed by the central bank.
SBVofficials believe the participation of the State-run Vietcombank, one ofthe major lenders in Vietnam, will help the fragile bank succeed in itsrestructuring schemes and assure the public of its more efficient andsecure business performance.
VNCB General Director Dam Minh Duc will continue to hold his position.
TheGovernment has placed the VNCB under special supervision since the bankhas shown significant weakness, and some of its former top executiveswere arrested for an alleged violation of State regulations.
Theauthorities decided on the acquisition in February after the bank failedto present a plan to assure its minimum equity required by the law inlate January.
The SBV said it will now coordinate with relevantagencies to develop the new institution, which inherits all the legalrights and responsibilities of the former organisation.
“With therole of the SBV and the collaboration of ministries and sectors, alongwith the close direction provided by the Government, the restructuringof the VNCB will achieve its targeted goals," the central bank said in anews release.
At a February meeting, the VNCB's management boardsaid the changes would offer a turning point for new opportunities in2015, during which it expects profitability and would work towardsstrengthening the foundations for multi-function operations in thefuture.
"Detailed schemes and measures have been well preparedfor the VNCB's forthcoming business activities," the bank stated on itswebsite. SBV officials said last week that the GP.Bank and Ocean Bankmight also be nationalised.
The VNCB needs 40 trillion VND (1.9billion USD) to restructure its operations, said Deputy Governor of theState Bank of Vietnam Nguyen Phuoc Thanh.
Speaking with localmedia at the ceremony to announce the change of VNCB's operating modelinto a one-member limited company, Thanh said the capital will come fromvarious sources, including the VNCB's sale of bad debts for the VietnamAsset Management Company and the SBV's refinancing loan.
Thanhnoted that with the SBV's ownership, people will feel more secure whentransferring their money to the bank. Meanwhile, several major banksalso promised to support the VNCB by sending the bank their money. Thus,the VNCB would receive the capital it needs for its operations.
TheVNCB was established by Trust Bank in May 2013. Trust Bank wasoperational for 23 years, with charter capital of 3 trillion VND (142.85million USD). In mid-2014, the SBV appointed new officials to the VNCBafter some former top executives at the bank were arrested for allegedlyviolating state regulations.
The VNCB, which is set to berestructured, signed a comprehensive cooperation agreement withVietcombank to facilitate growth and sustainability last August.
Accordingto the central bank, its takeover of the VNCB will terminate allstatuses, including the rights and interests of existing shareholders inthe construction bank. However, the legal rights and interests ofdepositors at the bank will be preserved.-VNA
