Do not sell banks to foreigners

Governor Nguyen Van Binh: If we sell a bank now, it will be selling it for "small change", while it could be sold for "tons of money".

There has been no move to show that the State Bank will increase the limit on foreign credit institutions' ownership of shares in weak commercial banks that are being restructured, although this solution is mentioned in the Project on Restructuring Credit Institutions.

Foreign banks hope

There is currently no sign that the State Bank will call for the participation of “foreign groups” in the market for buying and selling bank debt, as well as increasing their ownership shares in domestic banks, even though this is the force with the largest financial potential in the market. Meanwhile, foreign banks are still particularly interested in this issue.

Mr. Louis Taylor, General Director of Standard Chartered Bank Vietnam affirmed: “There is no easy answer to solving bad debt. However, I support allowing increased foreign bank ownership in domestic banks. This is the fastest way to increase new capital flows into the banking system. This is also the fastest way to apply international standards in corporate governance and risk management with domestic banks. This will help the Government quickly achieve its goals.”



If the "room" is opened, it is not impossible that foreign banks will massively buy domestic banks.

Mr. Tran Anh Vuong, Vice President of the Hanoi Young Entrepreneurs Association, also commented that many European corporations want to invest in Asia. Therefore, if Vietnam increases the shareholding ratio of foreign banks in Vietnam, it will mobilize a large amount of capital into this sector.

Leaders of many foreign banks also believe that the banking market is still an attractive investment field. However, investors are still watching and waiting for the Government's move. If the "room" for foreign bank ownership does not change, foreign banks' investment at this time is very risky.

It is known that the Project on Restructuring the Credit Institution System in the period of 2011 - 2015 has allowed foreign credit institutions to acquire, merge and increase the limit of share ownership in weak, restructured domestic joint stock commercial banks. However, up to now, this solution has hardly been considered.

Dr. Nguyen Tri Hieu, an economic expert, commented: “In the context of almost exhausted domestic capital sources, it is necessary to have a mechanism to increase foreign capital flows into domestic banks. Specifically, to attract foreign direct investment (FDI) into the banking sector, this ratio needs to increase to about 40%. In the future, when the health of the banking system is stable, it is necessary to fully open the banking sector.”

Will sell, but not cheap

Governor of the State Bank of Vietnam Nguyen Van Binh affirmed: “Increasing the limit on foreign bank ownership is a solution set out in the Project on Restructuring the Credit Institution System. However, if we do not do it skillfully, the national interests will not be guaranteed.”

According to Governor Nguyen Van Binh, our country's economy is in the most difficult situation, which means that bank stocks are undervalued. Therefore, if the "room" is opened, it is not impossible that foreign banks will rush to buy domestic banks. And when the economy recovers, the banking system will be in the hands of foreign enterprises, domestic enterprises with money cannot buy it back. In other words, if banks are sold now, they will be sold with "small change", while they could be sold with "tons of money". "It is necessary to make the banking system strong, to force foreign enterprises to buy back, but also to buy at a reasonable price, not with small change but with "tons of money". This will ensure the interests of domestic investors and force foreigners to buy stocks at a reasonable price", said the Governor.

Dr. Vu Viet Ngoan, Chairman of the National Financial Supervisory Commission, believes that Vietnam can restructure the banking sector without having to depend on external capital sources.

According to many economic experts, in the current context of weak bank management, increasing the shareholding ratio of foreign banks in domestic banks must be done cautiously, because these banks can completely dominate domestic banks. However, in cases where the banks are too weak and do not have domestic restructuring resources, the State Bank should sell them to foreign countries rather than "breathe life out" of these banks./.

According to VOV - NT