Banks yet to implement capital withdrawal plans, as required by SBV
21-09-2015 13:56:08+07:00
Banks yet to implement capital withdrawal plans, as required by SBV
The State Bank has not taken any drastic measures to force commercial banks to withdraw capital from other credit institutions, as requested. The aim was to reduce their ownership ratios to below 5 percent by the end of 2015.
Under Circular No 36, which took effect in February 2015, one commercial bank can hold a stake of no more than two other credit institutions, unless the other credit institutions are subsidiaries of the bank.
The proportion of other credit institutions’ shares must not be higher than 5 percent of the shares with voting rights.
The commercial banks which hold stakes in more than two other credit institutions must withdraw their capital within one year.
Banks have been told to plan to withdraw capital to ensure compliance with the regulations by February 1, 2016.
Only a few banks can sigh with relief after buying finance companies to which they had contributed capital.
Techcombank bought Vinachem Finance Company, VPBank bought Vinacomin Finance Company, and HDBank bought SGVF.
Vinaconex Viettel Finance Company has been taken over by SHB, and Maritime Bank has merged with both MDB and Vinatex Finance Company, in which it holds 10 and 11 percent of stake, respectively.
However, many banks cannot withdraw capital to reduce the ownership ratio to below 5 percent as stipulated.
Meanwhile, analysts commented that the State Bank has not taken any drastic measure to force commercial banks to obey Circular No 36.
Vietcombank holds a stake in four banks and one finance company. Of these, its ownership ratios in three institutions are higher than the permitted level.
Vietcombank now holds 9.59 percent of capital in Military Bank, 8.24 percent in Eximbank. It also has 5.07 percent of OCB’s shares and 4.37 percent of Saigonbank.
Eximbank holds shares in four credit institutions, including 10.3 percent of Sacombank’s shares. Eximbank is expected to withdraw capital from Sacombank; however, there is no detailed information about the plan.
Recently, the Maritime ownership ratio in MBB increased from 10.6 percent to 12.06 percent after it received 22.03 million MBB shares in the Mekong Development Bank’s merger & acquisition deal.
If MBB successfully increases its charter capital to VND16 trillion by the end of the year, the ownership ratio would fall to 9 percent, still higher than the permitted level of 5 percent.
VietinBank now holds 10.4 percent of Saigon Bank's shares, while ABBank holds 8.4 percent of EVN Finance.
Dr. Le Xuan Nghia, a renowned economist, while emphasizing that it is necessary to clear the cross-ownership status among banks, noted that it would be better to give time to banks to withdraw capital.
