Vietnam allows some banks to have up to 49% foreign ownership

HANOI :Vietnam's government said some private banks can increase their foreign ownership to up to 49 per cent from 30 per cent after they took over struggling financial institutions as part of the government's plan to restructure the banking system.

The government did not name any eligible banks in the statement posted on its website, but said the exemption did not apply to state-owned commercial banks.

"Total foreign investors' ownership in a commercial bank that compulsorily received a distressed rival may exceed 30 per cent but not exceed 49 per cent of its charter capital," according to the decree, which is expected to take effect from May 19.

In January, the central bank, the State Bank of Vietnam, directed two commercial banks to take over underperforming rivals as part of the restructuring drive that it said was necessary for political stability and social order.

Vietnam Prosperity Joint Stock Commercial Bank (VPBank) took over GPBank and Ho Chi Minh City Development Bank (HDBank) took over DongA Bank.

In October last year, also as part of the central bank's restructuring,  Military Commercial Joint Stock Bank (MBBank) took over smaller rival Ocean Bank, while state-owned Vietcombank took over Construction Bank.