PM Nods Two-step Equitisation for State Banks

The Prime Minister has given the nod to three big state-run commercial banks to take two steps towards equitisation.

 

These are the Bank for Industry and Development of Vietnam (BIDV), the Industrial and Commercial Bank of Vietnam (Incombank), and the Bank for Agriculture and Rural Development of Vietnam (Agribank).

 

In the first step, BIDV and Incombank are required to satisfy international standards on sound financial figures by the end of this year, and the deadline for Agribank is by the end of 2007.

 

In the second step, equitisation will be carried out for the BIDV and the Incombank from 2007 and for Agribank from 2008.

 

The Prime Minister also asked the Bank for Foreign Trade of Vietnam (Vietcombank) and the Mekong Delta Housing Development Bank (MHB) to complete their equitisation plans to submit to the government within this year in order to finalize their equitisation process in 2007.

 

According to the central bank, Vietcombank has completed its negotiations with the first-grade consulting firm. After viewing the negotiating results, the Equitisation Steering Board has asked Vietcombank to re-negotiate the fee. In case the fee cannot reduce, Vietcombank is allowed to negotiate with the second-grade consulting firm.

 

Reportedly, the State Bank of Vietnam is considering the results of evaluating the documents on equitisation consultation selection and the proposals for being directly negotiated with the potential consultants of MHB.

 

In a bid to speed up its equitisation, BIDV and the Austrian Raiffeissen Zentralbank Oesterreich AG (RZB) bank on November 6 signed a credit contract worth $200 million in order to help BIDV restructure its capital sources and assets before the first phase of its equitisation due in late 2007.

 

Together with accelerating the equitisation process of state-run banks, SBV is restructuring rural joint stock commercial banks. The central bank has allowed the Dong Thap Muoi, Hai Hung and Mien Tay rural banks to be transformed into urban joint stock commercial banks.

 

To date, eight out of 11 rural joint stock commercial banks have changed their business model.