Transferred weak banks under restructuring

Transferred weak banks under restructuring

Military Bank and Vietcombank, which took over struggling Oceanbank and CBBank late last year, have begun restoring the weak banks.

View of a MBV transaction branch. The MB expects to clear the MBV’s debts within five to seven years and restore the MBV to normal operations within 10 years. Photo tinnhanhchungkhoan.vn

Military Bank and Vietcombank, which received the compulsory transfer of vulnerable banks Oceanbank and CBBank late last year, have implemented works to restore the weak banks.

Vũ Thành Trung, Vice Chairman of the Board of Directors of Military Bank and Chairman of MBV Bank, said that the transfer of the OceanBank (now renamed MBV) to the MB was part of the Government's plans. According to the plans, the MB is supported to complete the MBV restructuring project within 10 years.

According to Trung, the MBV will not be affected after being transferred to the MB because there is no merger. The MB only supports capital and technology to revive the MBV. Accordingly, the MB will contribute a maximum capital of VNĐ5 trillion to the MBV. Based on the approved plans, the MBV can be converted into a limited liability bank with two or more members, a joint venture bank, a joint stock commercial bank, and a 100 per cent foreign-owned bank, merged into the MB or in other forms in accordance with legal regulations.

Phạm Như Ánh, General Director of MB, said the MB had received the MBV for only five to six months. With MBV’s accumulated loss of up to VNĐ15 trillion, the MB expected to clear the MBV’s debts within five to seven years and restore the MBV to normal operations within seven to 10 years.

Meanwhile, Vietcombank Chairman Nguyễn Thanh Tùng said that Vietcombank planned to restructure and revive the weak CBBank (now renamed VCBNeo) immediately after receiving the mandatory transfer in October last year.

After receiving the VCBNeo, Vietcombank conducted a comprehensive review of all operational areas of VCBNeo to develop an action plan to restore VCBNeo in accordance with the approved transfer plan. Currently, VCBNeo's operations have been well controlled, ensuring safety and minimising risks.

According to Tùng, Vietcombank has completed the conversion of the core banking system for VCBNeo using the same system as Vietcombank currently, which has helped ensure information technology synchronisation and security.

Other new technology systems are also being deployed according to Vietcombank's standards. At the same time, processes, regulations, and human resources of VCBNeo are also being reviewed and upgraded to comply with common standards.

Regarding development orientation of VCBNeo, Tùng said VCBNeo would become a digital bank, operating based on technology instead of traditional networks to optimise costs and operational efficiency.

"Vietcombank is currently developing a systematic technology investment strategy with a clear recovery roadmap for the coming period and will report it to shareholders as soon as possible," Tùng said.   

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