ASEAN KEY DESTINATIONS
Vietnamese banks struggle to boost capital
The State Bank also ordered its branches to strictly supervise the compliance of smaller banks, which must report progress to municipal central bank branches on a weekly basis. All branches must then report back to the central bank by December 12.
By the end of October, all 22 commercial banks not yet in compliance had received State Bank approval to increase register capital from an average of nearly VND1.6 trillion ($73.8 million) to an average of VND3.5 trillion ($166.7 million).
Eleven of these banks had received State Securities Commission approval to raise the additional funds by offering shares.
With just one month to go, however, some market watchers believed that raising capital in this manner is unlikely at this time due to the gloomy state of the financial markets.
The director of the State Bank branch in HCM City, Ho Huu Hanh, told VNExpress that three banks in HCM City were facing difficulties raising sufficient capital after State shareholders withdrew their investment.
Navibank, for example, has been listed on the Hanoi Stock Exchange since September under the code NVB, but its share price has fallen below the face value of VND10,000 to about VND8,000 per share, casting doubts on its ability to raise the funds needed to increase its charter capital from VND1 trillion to VND3 trillion.
With small commercial banks needing to attract an estimated VND30 trillion ($1.56 billion) in additional investment in order to survive, inter-investment among them may be the only option for survival, said Nguyen Van Thuan, head of the banking and finance department of HCM City Open University.
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