VietNamNet Bridge - Within the first six months, the State Bank bought three joint-stock banks for zero Vietnamese dong and assigned state-owned commercial banks to restructure the bought banks.

The Vietnam Construction Bank (VNCB) restarted its business activities five months after it was taken over by the central bank.

VNCB in early July announced a  new brand recognition system as ‘CB’ and launched a new promotion to attract depositors.

Under support of Vietcombank, CB plans to launch new credit products with the technology transferred from Vietcombank. 

CB has come back to the market after it suffered a serious incident last July, when many of the bank’s managers were arrested and prosecuted for wrongdoings which caused serious consequences. This lead to SBV’s decision to nationalize the bank.

Meanwhile, the other nationalized banks, GP Bank and Ocean Bank, are now still under restructuring. VietinBank is helping them in liquidity and the managerial system.

Nguyen Hoang Minh from the State Bank said shareholders would have no more benefits from the banks bought for zero dong, but depositors’ benefits would be guaranteed by the State. 

Do Thien Anh Tuan, a lecturer at the Fulbright Economics Teaching Program (FETP), after buying banks at zero dong, said the State Bank has to pump short-term capital into the banks, improve financial capability and spend money to improve operation efficiency, while carrying out restructuring and improving the financial status. 

Therefore, Tuan said, the financial resources that SBV has to spend for the weak banks will be huge. And though it can buy banks at zero dong, it will have to spend much more to revive the banks on the verge of bankruptcy.

An analyst said that the State Bank needs to spend at least VND3 trillion to revive the banks, while noting that commercial banks must have a minimum legal capital of VND3 trillion.

Commenting about the status of the zero dong banks, Lawyer Truong Thanh Duc from the Vietnam Banking Association (VBA) noted that the banks have been nationalized temporarily and they would be equitized again in the future.

Dr Nguyen Tri Hieu, a renowned banking expert, noted that the State Bank is sprinting to ‘clean’ the banking system and ‘tidy up’ the system by merging weak banks into stronger ones. 

“The number of banks has fallen from 40 to 30, and it will take several more years to cut the number further by a half,” Hieu noted.

NLD