Vietnam to handle 2-3 ailing banks, industrial projects this year

The State Bank of Vietnam (SBV) and the Commission for the Management of State Capital at Enterprises (CMSC) will have to finish the handling of at least two to three banks and industrial projects by the end of this year, according to a government decision.

The decision was clarified in the conclusions drawn from the November cabinet meeting, and Deputy Prime Minister Le Minh Khai will be in charge of overseeing the task.

Five Vietnamese private banks are currently under special surveillance by the SBV, namely Construction Bank (CBBank), OceanBank, GPBank, DongABank, and Saigon Commercial Bank (SCB). The SBV acquired CBBank, OceanBank, and GPBank in 2015 at zero dong to prevent a systematic collapse, and sent executives from state-controlled banks to help them reshuffle their operations.

Except for GPBank, the four others have been involved in economic scandals and their former executives are either in jail or have been indicted.

Meanwhile, there are 12 loss-making and stalled projects under the management of the Ministry of Industry and Trade. In May, the CMSC said that nearly half of them had started to report profits.

In September, a CMSC official said that eight of them would be handled with their own resources while the remaining four had submitted restructuring plans to the prime minister for consideration.

In May, the SBV said authorities had approved the forced handover of CBBank, OceanBank, and GPBank to larger Vietnamese banks.

SBV Governor Nguyen Thi Hong last month attributed lukewarm interest among investors to sluggish restructuring of weak lenders. The central bank will continue refining its restructuring plans and forward them to relevant authorities, Hong added.

The Vietnamese government has repeatedly invited Japanese banks to join its banking restructuring. Prime Minister Pham Minh Chinh made such a proposal to Mizuho Bank, one of the three largest lenders in Japan, last Saturday during his Tokyo visit.

Mizuho Bank acquired a 15% stake in state-owned Vietcombank in 2021 for $567 million. It now has two branches in Hanoi and Ho Chi Minh City.