Vietcombank now holds 7.1 percent of capital in Military Bank and 5.07 percent of OCB's shares (Source: cafef.vn) Hanoi (VNA) - Some commercial banks are racing to withdraw invested capital from other banks to ensure compliance with the State Bank of Vietnam (SBV)'s regulations on ownership limits in early 2016.
Under the central bank's Circular No 36, which will take effect on February 1, 2016, one commercial bank can hold a stake in no more than two other banks, unless the other banks are its subsidiaries. The proportion of shares of other credit institutions must not be higher than 5 percent of the shares with voting rights.
Only some banks will sigh with relief after buying finance companies to which they had contributed capital. For example, Techcombank bought Vinachem Finance Company, VPBank bought Vinacomin Finance Company, and HDBank bought SGVF.
Vinaconex Viettel Finance Company was also taken over by SHB, and Maritime Bank merged with both MDB and Vinatex Finance Company, in which it holds 10 and 11 percent of stake, respectively.
However, some other banks have not successfully withdrawn capital yet to reduce the ownership ratio to below 5 percent as stipulated, according to Nguoi Lao Dong (Labourers) newspaper.
Vietcombank currently still holds a stake in two banks, in which its ownership ratios are higher than the permitted level. It now holds 7.1 percent of capital in Military Bank and 5.07 percent of OCB's shares.
VietinBank currently also holds 10.3 percent of Saigon Bank's shares while Maritime Bank's ownership ratio in Military Bank also exceeds the permitted level at 8.9 percent.
Eximbank still holds shares in four credit institutions, including 8.76 percent of Sacombank's shares.
Senior officials from these banks affirmed that they would try to withdraw capital from other banks to meet the central bank's regulations.
Vietcombank's Chairman Nghiem Xuan Thanh said that his bank would reduce the ownership ratios at other banks to less than 5 percent to meet the central bank's deadline.
Vietinbank's General Director Le Duc Tho also said that his bank is implementing plans to sell its stakes in Saigon Bank to reduce its holdings in the bank from 10.3 percent to less than 5 percent as stipulated.
Maritime Bank's leaders also affirmed that the bank has planned to reduce its share holdings at Military Bank to the permitted level.
However, analysts said that it will not be easy for banks to sell stakes as the stock market at present is not strong enough to support the divestment.
Competition is very fierce as many other State-owned enterprises, which also hold bank shares, have to sell the shares to meet the government's regulations on non-core business investment.
The Sai Gon Jewellery Company needs to hold four auctions to successfully sell 25 million shares of Eximbank.
The Electricity of Vietnam last week sold only 40 million shares out of 81.5 million shares auctioned at initial price of 10, 000 VND per share.
The Vietnam Posts and Telecommunications Group (VNPT) has also planned to sell 71.5 million shares of Maritime Bank at an initial price of 11.700 VND per share, while Sai Gon Tourism Corporation has announced it will sell more than 10.7 million shares of Sai Gon Bank at initial price of 9,756 VND per share on December 2.-VNA
