Vietnam To Open Up Banking System - Vietnam Briefing News
Feb. 28 – In an attempt to obtain additional capital for its already debt-ridden banking system, Vietnam is further opening the door to foreign ownership of its banks.
Via a State Bank of Vietnam circular, the government announced that it has issued a draft decree that would allow the Prime Minister to permit foreigners on a case-by-case basis to obtain strategic stakes of over 30 percent in Vietnamese banks. It is stipulated that such foreign strategic partners must be a financial institution with at least US$20 billion in total assets, and also have less than a 10 percent stake in another Vietnamese bank.
The proposal also eases the rules regarding the sale of shares by local banks. The current regulations require that no more than 3 percent of total bank assets are non-performing. Currently, no Vietnamese bank comes close to meeting these requirements, and most banks are already operating in the red. The government acknowledged that non-performing loans have reached 10 percent of total bank assets.
With Vietnam having committed to join the ASEAN Link for cross-border equities trading in 2015, there is already strong interest from banks and private equity investors in Malaysia, Singapore and Thailand.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
For further details or to contact the firm, please email [email protected], visit www.dezshira.com, or download the company brochure.
You can stay up to date with the latest business and investment trends across Vietnam by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.
An Introduction to Doing Business in Vietnam
This new 32-page report touches on everything you need to know about doing business in Vietnam, and is now available as a complimentary PDF download on the Asia Briefing Bookstore.