Illustrative image (Source: giaoduc.net.vn) Hanoi (VNA) - The Government plans not to license any more whollyforeign-owned banks in Vietnam but encourages foreign banks to buy weakdomestic banks, said Deputy Prime Minister Vuong Dinh Hue.
At a recent forum on mergers andacquisitions (M&A), the Deputy PM said that many foreign banks are alsointerested in M&A deals with weak domestic banks.
The Vietnamese Government was speeding up the resolution and restructuring ofthe country’s credit institutions, he said, adding that for commercial banks,the Government encouraged the M&A of small-sized banks into large-sizedones as the number of banks in Vietnam is still quite large and a reduction isinevitable.
Earlier, the Government also said that itexpected restructuring of the banking sector through more M&A would helpVietnam have several major banks in the Southeast Asian region by 2021.
Besides, he said, the Government willorganise the equitisation and divestment of State-owned banks in the future.
According to Deputy PM Hue, Agribank - oneof Vietnam’s largest banks - has an initial public offering (IPO) roadmap setfor 2019 while the Government also plans to reduce the State capital at the twolarge banks of BIDV and Vietcombank through share sales to foreign and domesticinvestors.
After a long period of staying quiet aboutM&A, some banks, including healthy ones, have recently revealed plansinvolving M&A.
At this year’s annual general meeting ofshareholders in April, LienVietPostBank said that it was considering raisingthe charter capital, restructuring shareholders, completing a merger.
According to experts, M&A is anopportunity for banks to enhance financial capacity, expand markets and reachscale to achieve stronger growth. Besides, thanks to M&A, the Governmentdoes not have to exert much effort to handle the consequences of weak banks andhelp stabilise the financial market.
Vietnam has so far licensed nine wholly-foreign-owned banks, such as HSBCVietnam, ANZ Vietnam, Standard Chartered Vietnam, Shinhan Vietnam and Hong LeongVietnam, CIMB Vietnam, and United Overseas Bank (Vietnam).-VNA
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