VietNamNet Bridge – Foreign investors are looking for room to grow in the banking sector.

Foreign investors can enjoy higher stake ownerships in local banks under a fresh draft decree to supersede Decree 69/2009/ND-CP on foreign investors’ purchase of shares of Vietnamese commercial banks.

Besides, foreign investor ownership at underperforming banks subject to undergo a business shake-up will be decided by the prime minister.

In reality, the desire to extend room for foreign investors is common to most banks, but not only be restructured banks.

Ho Chi Minh City-based ABBank chairman Vu Van Tien wanted to hike foreign investors’ total ownership to 49 against 30 per cent.

“With such rate, we could make use of foreign partners’ management expertise while still holding control role,” said Tien, adding that in parallel to higher financial support foreign investors could help their local partners through transfer of advanced governance and risk control skills.

ABBank also has no more room under its cap for foreign investors.

Local giant VietinBank also wanted foreign investors’ total ownership to be further loosened.

“Further lowering the state ownership rate will help attract more foreign investment into the banking field,” said VietinBank chairman Pham Huy Hung.

Hung suggested reducing the state ownership rate to below 65 per cent, and even 55 per cent from 70 per cent.

“Our current stock price is good, but we now could not sell any more to foreign investors since the room [to foreign investors] was used up. More room and foreign investors’ engagement in bad debt trading would help quicken banking sector’s restructuring pace,” Hung said.

In this respect, a commercial joint stock bank leader blamed the State Bank’s (SBV) time-consuming record settlement process.

“Some records involve selling stakes to foreign partners were sent to the SBV for around a year, but there is still no feedback,” said the executive.

In this context, State Bank Governor Nguyen Van Binh said the SBV’s new draft decree which would be submitted to the government next month had included the proposal on room extension to foreign business partners.

“Now is the right time for giving the proposal. But how to extend and at what time needs careful consideration as besides objective desires, wider room for foreign partners affect different legal documents. The SBV will soon present a suitable rate of foreign investors’ shareholding in Vietnamese banks after factoring on foreign experiences as well as Vietnam’s current conditions,” Binh said.

Source: VIR