The government will sell off weak banks.
Vietnam will continue to strongly restructure many sectors such as finance and banking, state-owned enterprises, etc., including the sale of weak banks.
According to Deputy Prime Minister Vuong Dinh Hue, in the banking and finance sector, the government continues to encourage mergers and acquisitions (M&A) of smaller banks to become larger ones. In the near future, the state also plans to sell or transfer weak banks and those under special control, such as Construction Bank, GP Bank, and Oceanbank…
Specifically, the government will restrict and not issue any more operating licenses for 100% foreign-owned banks in Vietnam, but will still encourage and allow foreign organizations and banks to acquire weak domestic banks and transform them into 100% foreign-owned banks.
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| The government encourages mergers and acquisitions of weak banks. |
In addition, the Government will also implement equitization and divestment from state-owned banks, such as the equitization of Agribank in 2019; selling off state capital or issuing additional shares to increase charter capital and reduce state ownership in BIDV and Vietcombank. At the same time, the Government has also requested the State Bank of Vietnam to develop a restructuring plan for finance companies and people's credit institutions; and streamline the list of state-owned enterprises currently holding state capital...
“M&A activities are becoming an attractive investment channel and a crucial factor in promoting the successful restructuring process of Vietnam in general and of businesses in particular. The government is striving to create a truly transparent and favorable investment environment, encouraging the development of M&A activities in both quantity and quality,” Deputy Prime Minister Vuong Dinh Hue affirmed.
According to statistics, the value of M&A transactions in Vietnam from 2009 to 2018 reached US$48.8 billion with more than 4,000 deals. In 2017 alone, the value of M&A reached a record high of US$10.2 billion.