Foreign Ownership Still Capped at 30 per cent After Vietnam-US Bilateral Pact: SBV

The foreign ownership ratio in Vietnamese commercial banks will still be capped at 30 per cent after the signing of Vietnam-US bilateral pact on Vietnam’s entry into the World Trade Organization (WTO), an official of the central bank said.

 

The announcement was made by Phung Khac Ke, vice governor of the central bank at the Vietnam Business Forum opened on June 5. Banks are special businesses, hence, limiting foreign ownership ratio in domestic banks is necessary, he said.

 

Foreign ownership ratio in Vietnamese commercial joint stock banks is an important content of the newly-signed Vietnam-US bilateral agreement.

 

According to the bilateral talks, in the upcoming time, the foreign stake in Vietnamese banks, Ke said, will still be limited at 30 per cent as is applied currently. However the foreign ownership ratio of a single strategic partner will be raised to 20 per cent instead of the current 10 per cent, added Ke. 

 

In case commercial joint stock banks list on the stock market, the aforementioned ratio may be restricted at 30 per cent instead of 49 per cent as being applicable for other listing firms, Ke said. “The central bank is considering this contradiction amongst listing firms in order to issue a consistent rule,” the vice governor stated. However Ke explained “because on the stock market, banks are special businesses, such a foreign ownership limit of 30 per cent is necessary.”

 

Presently, the State Bank of Vietnam (SBV) is building and collecting opinions to complete a Decree on foreign credit organizations’ purchasing stake in Vietnamese banks. As scheduled, the ownership ratio of a single foreign bank would be 20 per cent out of total 30 per cent of foreign stake in a Vietnamese bank.

 

Lawrence Wolfe in the banking working team said that the Vietnamese Government and the SBV should allow foreign banks to hold more stake in domestic banks, even including majority stake. “If so, foreign banks will make more significant contributions to development of Vietnamese banks,” added Lawrence Wolfe.