Vietnam Mulls US$730Mln G-bond to Strengthen State Banks

Vietnam’s central bank has asked the Prime Minister to allow the issue of VND11.686 trillion (over $730 million) worth of book-entry government bonds to supplement capital to state owned banks in order to assist their partial privatization.

 

Under the scheme, the Industrial and Commercial Bank of Vietnam (Incombank) and the Bank for Investment and Development of Vietnam (BIDV) will get further state capital injection in December in order to be able to conduct equitisation next year. Meanwhile, the Bank for Agriculture and Rural Development (Agribank) will get financial support in 2007 to serve for its equitisation in the 2008-2010 period.

 

The specific funding for each bank, however, has not yet been revealed.

 

Reportedly, the Finance Ministry and the Ministry of Planning and Investment already contributed their opinions on the aforementioned proposal before it is submitted to the Prime Minister.

 

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