Foreign Investors Allowed to Hold More Stake in Vietnamese Banks

Strategic foreign investors will be allowed to purchase 15 per cent stakes in Vietnamese joint stock commercial banks, instead of 10 per cent as currently, according to a new decree issued by the Government on April 20.

 

In special cases, the Prime Minister can raise that limit for a strategic foreign investor to more than 15 per cent stake, but not over 20 per cent, the decree said.

 

Under the decree, a foreign credit institution is permitted to buy at most 10 per cent in a domestic bank, and a foreign individual 5 per cent.

 

The above regulations will also be applied for foreign credit institutions holding convertible bonds which can be changed into shares.

 

The decree specifies that strategic foreign investors must wait at least five years after buying stake in the bank to resell their shares.

 

However, a total foreign ownership ceiling in any Vietnamese bank still remains 30 per cent.

 

A Vietnamese bank which wants to sell shares to foreign investors must have minimum registered capital of VND1 trillion and healthy financial status. It is also required to have effective boards of management, supervisors and auditors and not be fined within the previous 24 months.

 

A foreign credit institution which wants to buy shares of Vietnamese banks must have assets of at least US$20 billion. It is also required to have banking sector experience, financial capability, and be rated by international credit rating agencies. (Labour, VNA)