Vietnam to complete forced transfer of 3 ailing banks this year: report

Compulsory transfer plans of three weak banks will be submitted to competent authorities this month and the transfer completed by the year-end, says Deputy PM Le Minh Khai.

The Vietnamese government has completed valuation of the three weak banks and their transfer will be completed after several delays, he said in a report delivered to the parliament Monday morning.

The three ailing lenders – Construction Bank, OceanBank, and GPBank – were acquired by the State Bank of Vietnam (SBV), the nation's central bank, at zero cost in 2015. They have been placed under special surveillance by SBV, in addition to DongABank.

The SBV said last year that it had received in-principle approval from relevant authorities on the forced takeover schemes for the four above-mentioned banks.

CEO of military-run MBBank Pham Nhu Anh said last month that the bank had submitted a plan to take over a weak bank from the SBV and that it expected to complete the deal this year or in 2025. The ailing bank would become an independent unit of MBBank, he added

At its 2024 AGM last month, Hanoi-based VPBank, the largest lender by charter capital in the country, received approval from shareholders on a plan to acquire an ailing bank without specifying the target.

Market rumors have it that VPBank will acquire Hanoi-based GPBank, which stands for Global Petro Sole Member Limited Commercial Bank. The latter will operate as a single-member limited liability company owned by VPBank, documents released ahead of its AGM showed.

Besides the two banks ready to join restructuring of the banking system, state-controlled Vietcombank and privately-run HDBank have also shown interest in taking over ailing banks.

The government report also mentioned that the Vietnam Development Bank (VDB), one of the two policy banks in the country, has embarked on a restructuring plan. VDB had managed to reduce its accumulative loss by 20% and toxic loans by 37.7%, or VND15 trillion ($589.3 million).

The government will “continue to reshuffle credit institutions in parallel with the handling of bad debt, focusing on transferring weak banks,” the report said.