VietNamNet Bridge – Buildbank, the commercial bank which aims to mobilize capital and lend money in the real estate and construction sector, has been formed up.

In 2012, the Ministry of Construction sent a dispatch to the State Bank of Vietnam, requesting the watchdog agency to consider the proposal of the Vietnam Real Estate Association on the establishment of the Building Bank.

The State Bank and economists both thought there’s no need to have a building bank, because all the 37 existing banks were enough to provide loans to fund real estate projects. This meant that the idea was rejected.

However, such a bank has still been set up with the official name Buildbank. What happened with the idea on construction bank?

TrustBank turns into Buildbank

It was a big surprise to everyone that TrustBank has changed its name into Buildbank. Just some days ago, local newspapers reported that TrustBank, in its restructuring process, would sell 85 percent of its stakes to Thien Thanh Group and a group of 20 individual investors to get VND4.5 trillion. After that, it would increase the capital by VND2 trillion, and then by another VND2.5 trillion.

Many strange things have happened. A group of investors have bought TrustBank, but only Thien Thanh’s representative has turned up. Though Thien Thanh holds less than 10 percent of stakes, the bank’s shareholders’ meeting still occurred at Thien Thanh’s headquarters. Other events also took place at Thien Thanh’s places, which made people believe that Thien Thanh now holds the control over TrustBank.

However, in the latest happenings, the newly elected board of directors comprised of a familiar name – Phan Thanh Mai, who is now Secretary General of the Vietnam Real Estate Association. At Trustbank, he is Standing Deputy Chair.

At a recent meeting with the press, Mai said he represents a group of shareholders who are the real estate and construction firms from Hanoi. This could be one of the reasons that make TrustBank turn into Buildbank.

As such, the Vietnam Real Estate Association finally still can set up a construction bank as it wants.

Regarding the financial capability of Trustbank, it had had the total assets of VND3 trillion by the end of 2011. The sum of money is less than 50 percent of the capital needed to restructure the bank.

Thien Thanh is obviously not the actual biggest owner of the bank. Analysts believe that the key lies in the hidden 20 individual investors whose representative is Phan Thanh Mai.

They also said that in order to persuade the Ministry of Construction to support the idea about the building bank and change TrustBank into Buildibank, they must be very influential VIPs.

70,000 real estate and construction firms operational in Vietnam by the end of 2012, would be happy with the news about Buildbank. However, Governor of the State Bank Nguyen Van Binh might not think so.

On the news about Buildbank, Binh once affirmed that as the governor, he would not agree on the establishment of the bank.

No official statement about the establishment and operation of the bank has been made. However, it is believed to be a bank called the “backyard of the big guys,” which specializes in providing capital to them.

If it is, this would be not good news. Some commercial banks have been put at the point of death just because they are the “backyards” of the too ambitious businessmen and investors.

NCDT