Google

ASEANAFFAIRS
Sign up | Log in

    ASEAN PROFILES

  ASEAN KEY DESTINATIONS

Home>>Daily News>>Vietnam>>Economy >>SBV to end cross-ownership in Vietnamese banks
NEWS UPDATES Asean Affairs   January 30, 2019  






SBV to end cross-ownership in Vietnamese banks

The State Bank of Viet Nam (SBV) has set a target to stop cross-ownership among credit institutions (CIs) by the end of 2020.

Under Circular No 46/2018/TT-NHNN, which will take effect from March 1 this year, major shareholders of a CI and their relatives will not be allowed to hold more than 5 per cent of charter capital in another credit institution from December 31, 2020.

Major shareholders and their relatives are also prohibited from increasing their stake holdings in any CI in any form, except for special cases regulated by the central bank.

In addition, CIs are not permitted to lend to major shareholders and their relatives after 90 days from the effective date of the new circular until shareholders meet regulations on holding less than 5 per cent of another CI’s charter capital.

According to analysts, the favourable stock market and the country’s positive economic growth had helped some large banks, including Vietcombank, step up divestment from other financial institutions to meet the new regulation.

At the end of 2018, Vietcombank officially completed a plan to reduce its holding ratio at other CIs, including Military Bank, Eximbank, Saigon Bank, OCB and Cement Financial Company to meet the central bank’s requirements.

According to SBV Governor L? Minh H?ng, the bank had directed and supervised CIs to resolve cross-ownership through share transfer and divestment and mergers and acquisitions in recent years, which had helped reduce cross-ownership significantly.

SBV data showed that the number of pairs of CIs with direct cross-ownership had decreased from seven in 2012 to one.

Direct share ownership between banks and enterprises also decreased from 56 pairs in June 2012 to four: including Eximbank with Viet Dragon Securities Company, ABBank with An Binh Securities Company, Sacombank with Ben Tre Import and Export Joint Stock Company and Orient Joint Stock Commercial Bank (OCB) with Vien Dong Insurance Company.

For violations of share ownership, Saigonbank, PGBank, Bao Viet Bank and PVcomBank have shareholders which are State-owned enterprises owning more than 15 per cent of the banks’ charter capital.

Saigonbank, PG Bank and Bao Viet Bank, still have groups of shareholders related to each other owning over 20 per cent of the banks’ charter capital.

According to a SBV representative, who declined to be named, cross-ownership and the problem of dominant shareholder groups had basically been controlled but was not yet resolved. The main reason was that the settlement of cross-ownership was actually a matter of transferring shares, so the CIs, which were public companies and listed on the stock exchanges, needed a step-by-step implementation schedule to determine the time, price and suitable investors with an aim to ensure maximum benefits for both the CIs and the State.

However, expert Bui Quang Tin said strict regulations on cross-ownership were necessary to speed up the settlement, as the practice had a negative impact on the banking system, evident in the high ratio of non-performing loans.

Due to cross-ownership, many banks had increased their charter capital to several trillion Vietnamese dong; however, the figures were unrealistic as they came from loans from other banks.


Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates
Contact: marketing@aseanaffairs.com

Comment on this Article. Send them to  your.views@aseanaffairs.com

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
 
or
submit your comment in the box below



  Today's  Stories                     January 30, 2019
• VN lures $1.9 billion in FDI in January
• Cambodian workers ‘vulnerable’ in Thailand Subcribe: Asean Affairs Global Magazine
• PLN targets to complete 20 percent of 35,000 MW program this year Subsribe Now !
• SBV to end cross-ownership in Vietnamese banks
Research Reports
on Thailand 2007-2008

• Textiles and Garments Industry
• Coffee industry
• Leather and footwear industry
• Shrimp industry

• Trade deficit grows once more
Asean Stock Watch  November 1,  2018

• Asean Stock Watch-November 1, 2018
Asean Analysis                June 15,  2018
• Asean Analysis June  11, 2018
Inflation may yet peak —Diokno
Advertise Your Brand

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan

ASEAN  ANALYSIS

This year in Thailand-what next?


AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

 


Name

Name


Email

Email



1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

| Terms of Use | Site Map | Privacy Policy  | DISCLAIMER |

Version 5.0
Copyright © 2006-2019 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand
asean@aseanaffairs.com