Cross Holding in Vietnam’s Banking System Eradicated, SBV Says

Diep Nguyen

15:21 21/10/2019

BizLIVE -

From the censorship of supervising committee of the State Bank of Vietnam, by June 30th 2019, the number of credit institutions hold stakes in one another came down to almost zero.

Cross Holding in Vietnam’s Banking System Eradicated, SBV Says
According to the latest report from the State Bank of Vietnam (SBV), by June 30th 2019, Vietnam basically eradicated cross holding in the banking system.
For detail, from the censorship of supervising committee of the State Bank of Vietnam, by June 30th 2019, the number of credit institutions hold stakes in one another came down to almost zero. In 2012 when the government asked the credit institutions to stop this phenomenum, that was about more than 12 credit institution had such behaviors.
In terms of direct share owning in banks and companies, accordingly, by June 2019, there is only one commercial bank with share cross holding. In 2012 at the time of peak in banking share cross holding, there were 56 pairs of crossholding in the banking system.
One case left is Asian Commercial Bank (ACB) and Hoa Phat Real Estate Company, the rate of ownership of ACB in Hoa Phat Real Estate Compnay is 2.86% and 0.046% vice versa.
The above results did not come after a day, it took the long process of dealings and divestment, in some cases, there were some late cases because of other reasons.
Other related principles have been set out by State Bank of Vietnam (SBV) in Circular 36, effective from February 2015 with one year of fulfilling. But after several years, some member companies can do it.
In the case that Vietcombank owning 5% stake in MB, Eximbank and OCB, it takes some months to divest and Vietinbank also had to divest in Saigonbank in several steps.
But apart from that, the fact that one commerical bank reducing stakes in other commercial banks, with the rate of under 5% can be considered to be normal investment.

DIEP NGUYEN

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