Vietnam to allow higher bank investments
The Vietnam government is preparing a law that will grant foreign investors to own more than the currently allowed 30 per cent stakes in a national bank, according to a note posted on the website of the State Bank of Vietnam.
As of now, combined total foreign ownership in a local bank cannot exceed 30 per cent.
For an individual foreign investor in a local bank the allowed stake ist limited at 5 per cent, while a foreign institution or company can own up to 15 per cent.
The new regulation is seen as a move by the Vietnam government to attract more foreign investment into local banks, many of which are suffering from a high level of bad debt and are in urgent need of restructuring. However, the State Bank of Vietnam did not say when when the regulation will come into effect.
Vietnam’s banking system is grappling with one of the region’s highest bad debt ratios, which rose to 8.82 per cent of loans in September 2012 from 3.07 per cent at the end of 2011, central bank data showed.
The government said bad debt should be cut to below 3 per cent of loans by 2015. The weak financial system is one of the country’s biggest economic problems. Fitch Ratings has put the total non-performing loan figure at 13 per cent of loans.
The Vietnam government is preparing a law that will grant foreign investors to own more than the currently allowed 30 per cent stakes in a national bank, according to a note posted on the website of the State Bank of Vietnam. As of now, combined total foreign ownership in a local bank cannot exceed 30 per cent. For an individual foreign investor in a local bank the allowed stake ist limited at 5 per cent, while a foreign institution or company can own up to 15 per cent. The new regulation is seen as a move by the Vietnam government...
The Vietnam government is preparing a law that will grant foreign investors to own more than the currently allowed 30 per cent stakes in a national bank, according to a note posted on the website of the State Bank of Vietnam.
As of now, combined total foreign ownership in a local bank cannot exceed 30 per cent.
For an individual foreign investor in a local bank the allowed stake ist limited at 5 per cent, while a foreign institution or company can own up to 15 per cent.
The new regulation is seen as a move by the Vietnam government to attract more foreign investment into local banks, many of which are suffering from a high level of bad debt and are in urgent need of restructuring. However, the State Bank of Vietnam did not say when when the regulation will come into effect.
Vietnam’s banking system is grappling with one of the region’s highest bad debt ratios, which rose to 8.82 per cent of loans in September 2012 from 3.07 per cent at the end of 2011, central bank data showed.
The government said bad debt should be cut to below 3 per cent of loans by 2015. The weak financial system is one of the country’s biggest economic problems. Fitch Ratings has put the total non-performing loan figure at 13 per cent of loans.
