Vietnam central bank in search of investors for ailing lender SCB

The State Bank of Vietnam (SBV), the country’s banking regulator, is active in looking for investors that are willing to join the restructuring of troublesome Saigon Joint Stock Commercial Bank (SCB).

Once there are interested investors, the SBV will ask for approval from the government, the central bank said in a report sent to the parliament.

The SBV has placed SCB under special scrutiny since October 2022 after many branches and transaction offices of the latter recorded a run on deposits following the arrest of a real estate tycoon that was allegedly tied to the bank.

SCB has gradually stabilized its operations and is focusing on its revamp, the SBV said.

The central bank last month appointed Phan Dinh Dien, a board member of wholly state-owned Agribank, to the chairmanship of SCB, replacing Vu Anh Duc. Dien is a veteran banker, specializing in debt settlement.

Besides SCB, authorities have given the greenlight to the schemes having domestic commercial banks take over four other peers – CBBank, OceanBank, GP Bank, and DongABank – also under special control since 2015. The SBV acquired CBBank, OceanBank, and GP Bank at zero cost and placed the DongA Bank under special scrutiny since.

The commercial banks that are set to acquire the four ailing ones have been asked to refine and submit their acquisition plans to the government for consideration.

The SBV is working on amendments to the Law on Credit Institutions in a bid to clarify mechanisms for restructuring weak banks and prevent manipulation in the banking system. The amendments are expected to be approved by the parliament in the upcoming gathering to be convened later this month.