HANOI — Vietnam's government is allowing 49% foreign ownership of a handful of banks — up from 30% — that have taken over struggling financial institutions in a move to quicken the central bank's restructuring of troubled lenders.
The new decree went into effect Wednesday, according to a statement on the government’s website.
"This will enable some banks to get more foreign investment and find overseas strategic partners," said Tran Tuan Minh, chief executive officer of TVI, a Hanoi-based equity research and investment firm. "It will also encourage foreign investors to join the restructuring process of weak banks."
The State Bank of Vietnam in January announced the transfer of two distressed banks, Global Petroleum Bank, known as GPBank, to Vietnam Prosperity Joint Stock Commercial Bank, or VPBank, and DongA Bank to Ho Chi Minh Development Joint Stock Commercial Bank, or HDBank. The central bank said the transfers were part of the regulator's overhaul of weak domestic banks.
GPBank and DongA Bank are now 100% owned, respectively, by VPBank and HDBank.
Two other distressed lenders were transferred to other banks last year. Bank for Foreign Trade of Vietnam, or Vietcombank, took over Ocean Bank. Military Commercial Joint Stock Bank absorbed Construction Bank.