The headquarter office of the State Bank of Vietnam in Hanoi. Photo: Minh Tuan/BizLIVE
The Vietnamese government plans to loosen the cap on foreign holdings at local banks by 2020 in a bid to attract overseas investment and expertise to boost the banking overhaul, according to a master plan for the economic reform in the 2016-2020 period.
According to the plan drafted by the Ministry of Planning and Investment, the government will continue to equitize state-controlled commercial banks and reduce the state holding to as low as 65% in the upcoming five years.
Vietnam Bank of Agriculture and Rural Development (Agribank
), the second largest lender in the country by assets, will undergo privatization by 2020.
Vietnam currently caps foreign ownership in a domestic bank at 30%, with a 15% limit for a non-strategic investor. A foreign strategic investor is allowed to own 20% in a Vietnamese bank.
The government in April 2015 said it would soon issue a decree to allow foreigners to own more than 30% of a Vietnamese bank. However, no specific move has been made since then.
The State Bank of Vietnam
(SBV), the country’s banking regulator, last year acquired the ailing lenders namely Vietnam Construction Bank, OceanBank and GP Bank at zero cost.
It also allowed Maritime Bank to merge Mekong Development Bank and BIDV
to acquire Mekong Housing Bank. More mergers and acquisitions are expected to come online soon.
SBV now holds a 77.1% stake in Vietcombank (VCB), 95.3% in BIDV (BID) and 64.6% in VietinBank (CTG).