Banks rush to lift foreign ownership ratio ceiling


Vietcombank and VietinBank, the two largest state-invested commercial banks, are seeking the government’s permission to lift the foreign ownership ratio ceiling to 35-40 percent.
Vietcombank said it wants 10 percent more room for foreign investors, so that it can issue more shares to the strategic partner. 

Japanese Mizuho Bank has expressed its wish to buy 5 percent of stake more to raise its ownership ratio to 15 percent.
Under current regulations, one foreign investor must not hold more than 20 percent of the chartered capital of one bank, while the total proportion of stakes foreign investors can hold in one bank must not be higher than 30 percent. Believing that the limitations keep foreign investors away, a series of banks have proposed to raise the ceiling.
Dau Tu reported that though having sold 30 percent of stakes to the foreign strategic partner, An Binh Bank still wants to sell up to 49 percent of stakes to foreign investors. Its two large shareholders, Maybank and IFC, now hold 30 percent of the bank’s total chartered capital.

At the 2016 annual shareholders’ meeting, Vo Tan Hoang Van, SCB’s CEO, said that the State Bank has allowed the bank to seek foreign strategic investors to sell 50 percent of its stake.
In February, the Military Bank (MBBank) got approval from the State Bank to lift the foreign ownership ratio in the bank from 10 percent to 20 percent.
Meanwhile, VP Bank said it is considering listing its shares on the bourse and looking for foreign strategic partners. Since Singaporean OCBC withdrew its capital in late 2013, VP Bank now does not have foreign investors.
In principle, the government of Vietnam allows commercial banks to attract capital from foreign shareholders, and the foreign ownership ratio could be higher than 30 percent if approved by the government. 
In some cases, the government would accept to sell 100 percent of stakes to attract foreign investors to restructure weak banks.
In 2014, local newspapers reported that GP Bank planned to sell 100 percent of its stake to Singaporean UOB Group. However, the deal failed. 
Andy Ho, managing director of VinaCapital, in an interview with Dau Tu Chung Khoan, said in order to attract foreign capital to the banking sector, the government of Vietnam needs to lift the foreign ownership ratio ceiling.

He said one of the reasons that have caused foreign investors to feel reluctant to invest in Vietnamese banks is the limited room in banks.