Customers make bank transactions at Construction Bank branch in Hanoi. (Photo courtesy of the bank)Hanoi (VNS/VNA) -Foreign financial institutions were eyeing up poorly-performing Vietnamesebanks after being given the green light to acquire stakes in local institutionsin a move to speed up the restructuring of the country’s banking industry,according to banking expert Nguyen Tri Hieu.
M&As in the banking industry had remainedquiet for the past two years after witnessing a record from 2011-2016.
However, Hieu said things were warming up thisyear as the Government wanted to speed up the restructuring of ailing bankswhile small banks also had to increase capital to meet the State Bank ofVietnam (SBV)’s Basel II regulations by 2020.
“The Vietnamese financial market holds a lot ofpotential, but license applications to establish a bank are very difficult, sopurchasing shares in local banks or acquiring a 100 percent stake in ailinginstitutions are the best options for foreign investors,” Hieu said.
Last week, Japanese-based J Trust Corp expressedan interest in acquiring a stake in the Construction Bank (CB) - one of threeweakest State-owned banks under the State Bank of Vietnam (SBV) - took over forzero Vietnamese dong in 2015 to prevent a systematic collapse of thebanking system due to its inability to settle soaring bad debts.
During a recent meeting with Deputy PrimeMinister Vuong Dinh Hue, Nobiru Adachi, Senior Managing Director of JTrust, said his group wanted to be involved in the restructuring of CB.
Besides the capital contribution, J Trust wouldalso support CB in terms of technology and financial operations, Adachisaid, expressing his hope that the Vietnamese Government and the SBV wouldcreate favourable conditions for the success of its negotiations and thetransaction.
According to Hue, the Vietnamese governmentprovides every possible support for domestic and foreign investors, especiallythose with strong financial and governance capacity as well as experience inbanking, to take part in restructuring poorly-performing Vietnamesebanks.
Although the Vietnamese Government has no plansto establish more wholly foreign-owned banks in the country, it encouragesforeign investors to participate in restructuring weak banks and then become anentity holding 100 percent of capital in line with domestic legal regulations.
Hue asked Adachi and collaborators tocontinue discussing their offer to submit to the Vietnamese government and thePrime Minister for consideration.
Apart from CBBank, Hue also welcomedthe involvement of J Trust, which successfully revived severalfinancial-consumption companies and restructured weak banks in the Republic ofKorea and Indonesia, in restructuring other credit organisations in Vietnam.
Richard F.Chandler, Chairman of theSingapore-based Clermont Group, also expressed his desire to invest inVietnamese banks during a meeting with SBV Governor Le Minh Hung.
With experience in bank restructuring andbad debt settlement in Brazil, Russia, Japan and India, he said hisgroup wanted to take part in the restructuring of Vietnamese banks, noting thatthe group wished to make more contributions to Vietnam.
In Vietnam, Clermont Group invested in Hoan MyMedical Corporation in 2013. From six hospitals at that time, Hoan My nowcomprises 15 hospitals and six clinics, where more than 4,000 employees serve3.7 million patients annually.
SBV representatives also announced a potentialforeign investor was willing to acquire OceanBank - another bankacquired by the SBV for zero dong.-VNS/VNA
M&As in the banking industry had remainedquiet for the past two years after witnessing a record from 2011-2016.
However, Hieu said things were warming up thisyear as the Government wanted to speed up the restructuring of ailing bankswhile small banks also had to increase capital to meet the State Bank ofVietnam (SBV)’s Basel II regulations by 2020.
“The Vietnamese financial market holds a lot ofpotential, but license applications to establish a bank are very difficult, sopurchasing shares in local banks or acquiring a 100 percent stake in ailinginstitutions are the best options for foreign investors,” Hieu said.
Last week, Japanese-based J Trust Corp expressedan interest in acquiring a stake in the Construction Bank (CB) - one of threeweakest State-owned banks under the State Bank of Vietnam (SBV) - took over forzero Vietnamese dong in 2015 to prevent a systematic collapse of thebanking system due to its inability to settle soaring bad debts.
During a recent meeting with Deputy PrimeMinister Vuong Dinh Hue, Nobiru Adachi, Senior Managing Director of JTrust, said his group wanted to be involved in the restructuring of CB.
Besides the capital contribution, J Trust wouldalso support CB in terms of technology and financial operations, Adachisaid, expressing his hope that the Vietnamese Government and the SBV wouldcreate favourable conditions for the success of its negotiations and thetransaction.
According to Hue, the Vietnamese governmentprovides every possible support for domestic and foreign investors, especiallythose with strong financial and governance capacity as well as experience inbanking, to take part in restructuring poorly-performing Vietnamesebanks.
Although the Vietnamese Government has no plansto establish more wholly foreign-owned banks in the country, it encouragesforeign investors to participate in restructuring weak banks and then become anentity holding 100 percent of capital in line with domestic legal regulations.
Hue asked Adachi and collaborators tocontinue discussing their offer to submit to the Vietnamese government and thePrime Minister for consideration.
Apart from CBBank, Hue also welcomedthe involvement of J Trust, which successfully revived severalfinancial-consumption companies and restructured weak banks in the Republic ofKorea and Indonesia, in restructuring other credit organisations in Vietnam.
Richard F.Chandler, Chairman of theSingapore-based Clermont Group, also expressed his desire to invest inVietnamese banks during a meeting with SBV Governor Le Minh Hung.
With experience in bank restructuring andbad debt settlement in Brazil, Russia, Japan and India, he said hisgroup wanted to take part in the restructuring of Vietnamese banks, noting thatthe group wished to make more contributions to Vietnam.
In Vietnam, Clermont Group invested in Hoan MyMedical Corporation in 2013. From six hospitals at that time, Hoan My nowcomprises 15 hospitals and six clinics, where more than 4,000 employees serve3.7 million patients annually.
SBV representatives also announced a potentialforeign investor was willing to acquire OceanBank - another bankacquired by the SBV for zero dong.-VNS/VNA
VNA
