Weak Banks Attract Huge Number Of Investors

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Restructuring weak banks in particular, weak credit institutions in general are still the focus of the banking industry. Currently, there are three banks which have been bought back by the State Bank of Vietnam (SBV), including Construction Commercial One Member Limited Liability Bank (Construction Bank CBBank), Global Petro Sole Member Limited Commercial Bank (GPBank) and Ocean Commercial One Member Limited Liability Bank (OceanBank). In addition, DongA Joint Stock Commercial Bank (DongA Bank) is a bank under special control.

The restructuring of the above mentioned banks has been mentioned many times and there have been many information since 2016 that the foreign partners as the leading financial institutions, with long experience in operation restructuring comes to negotiate and buy the whole.

In the report to the National Assembly last May, SBV updated that it was actively implementing structural steps and dealing with three compulsory buying banks previously. In which, SBV has completed and submitted to the prime minister the plan to transfer and restructure OceanBank after transferring to foreign investors. Along with that, the plan to restructure GPBank, CBBank and DongABank is being urgently completed to submit to competent authorities for their approval in accordance with the provisions of law.

At the meeting of prime minister Nguyen Xuan Phuc in the framework of the recent G20 Conference, Nobiru Adachi, Chair of J.Trust Bank said that he had studied and carefully calculated financial indicators of CBBank and sent the offer to SBV to buy back and restructure this bank. Nobiru Adachi also affirmed that if being facilitated, CBBank would be reformed in a short time and would be soon brought back to its previous position.

Also at the meeting of prime minister Nguyen Xuan Phuc with businesses in Vietnam recently, in which the prime minister met Han Chang-woo, Chair and general director of Maruhan Group, Han Chang-woo expressed his desire to receive support of the prime minister, government and Vietnamese authorities in the process of participating in the restructuring of banks in Vietnam, thereby contributing to the development of finance as well as economic development in Vietnam.

According to our own source, at the meeting of the leader of the Maruhan Group, there was also the participation of OceanBank chair Do Thanh Son. Previously, the senior leaders of this group attended both meetings of OceanBank’s 2018 and 2019 plans.

Not only J. Trust and Maruhan but also many foreign investors such as Srisawad Corporation (Thailand) and Clermont Group (Singapore) expressed their desire to buy back and participate in restructuring weak banks and credit institutions of Vietnam. In particular, Srisawad Corporation expressed its willingness to buy back the loss-making financial company of Agribank, accepting the debts and losses of this company to over 500 billion dong. The Clermont Groupwhich owns Hoan My Medical centre in Vietnam “wants to invest in the banking sector through participating in the restructuring process of Vietnam’s banking system, contributing to the development of banking system in particular and Vietnam’s economy in general “.

And not only foreign investors want to buy back Vietnam’s weak banks, but also domestic investors are very interested in. A source told us that investors who are healthy banks want to restructure a weak bank. If this plan is approved, this will be the first time in Vietnam there is such a way of restructuring with the bank, which is the bank in the bank. That is, a healthy bank will provide support for a weak bank to restructure independently to revive that bankunlike the old ways of restructuring, merging together; And it is not the same as the support of state-owned banks with weak banks today.

 

Category: Finance, Vietnam

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