Banks change CEOs while crossing the stream
Banks change CEOs while crossing the stream
Commercial banks have seen significant changes in leadership regularly over the last two years.
At most state-owned commercial banks, presidents have the decisive voice in the banks’ operations.
At VietinBank, for example, though Nguyen Van Thang was appointed as the CEO in 2009-2014, the power was still in the hands of Pham Huy Hung, the then-chair of the board of directors.
Agribank has been well known as a “bad land” for bankers because the presidents and CEOs of the bank have always disagreed on the issues relating to the bank’s operation.
The State Bank of Vietnam (SBV) once reportedly had to dismiss both CEO and president because of problems of credit and bad debt.
At joint stock commercial banks, a CEO term of office lasts four to five years. However, banks have changed CEOs regularly over the last five years, once every one to two years.
TienPhong Bank, for example, had three CEOs within two years, LienVietPost Bank changed CEOs three times within four years. Half of the 40 operational commercial banks changed their key personnel on boards of directors and CEOs.
L, the CEO of a bank, has stayed the longest in his post. He has worked there for nearly 10 years, since the day it was a rural bank. The reason behind his long stay is a surprise to many people: the CEO and the bank’s president are of harmonious moons.
Nguyen Dinh Tung, CEO of OCB, said in most cases, the offered income is not the major reason behind CEOs’ decisions on whether to continue working for banks.
“As for me, a credit institution with ‘clean’ assets and transparent working principles is the most attractive, even though if it is small,” he said.
Nguyen Tri Hieu, a renowned banker, noted that in Vietnam, banks are managed by families.
“At the banks where I worked for in Vietnam, the managers put their relatives into key posts, even though the relatives were not really qualified,” Hieu noted.
Truong Van Phuoc, now deputy chair of the National Finance Supervision Council, who once was CEO of Eximbank, one of the biggest Vietnamese commercial banks, noted that CEOs need to have “the art of communication” and they need to be flexible in any event.
“It may happen that the president will ask you to provide a ‘risky’ loan to a company. If you refuse to implement the instruction, you will no longer be CEO. But if you do what you are told to do, you would bear the consequences if bad things occur,” Phuoc said.
