Foreign ownership cap at Vietnam banks acquiring weaker ones may rise to 49 percent

The State Bank of Vietnam (SBV) has proposed raising the foreign ownership cap at domestic commercial banks with plans to take over poor-performing banks from 30 to 49 percent. In particular, the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Military Bank (MB), Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank), and Vietnam Prosperity Joint Stock Commercial Bank (VPBank) announced their plans to take over DongA Joint Stock Commercial Bank (DongA Bank), Vietnam Construction Bank, Ocean Commercial One Member Limited Liability Bank (Oceanbank), and Global Petro Commercial Joint Stock Bank (GPBank). However, Vietcombank cannot see its foreign ownership cap increase to 49 percent as over half of its charter capital is being held by the State. According to the two lenders, the foreign ownership cap hike will not cause a great impact on the local banking system. In particular, the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Military Bank (MB), Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank), and Vietnam Prosperity Joint Stock Commercial Bank (VPBank) announced their plans to take over DongA Joint Stock Commercial Bank (DongA Bank), Vietnam Construction Bank, Ocean Commercial One Member Limited Liability Bank (Oceanbank), and Global Petro Commercial Joint Stock Bank (GPBank).