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Banking & Finance

SBV to buy VNCB

Released at: 16:50, 06/03/2015

SBV to buy VNCB

Central bank issues decision nominating a purchase price of VND0 per share.

by Hung Nguyen

The Governor of the State Bank of Vietnam (SBV) signed Decision No. 249/QD-NHNN on March 5 on taking over all shares of the Vietnam Construction bank (VNCB) and transforming it into a single member limited company owned by the State. The decision nominates a price of VND0 per share and the termination of all rights, benefits, and shareholder roles.

The charter capital of the new bank is VND3 trillion ($142.85 million).

The decision also states that the entity will be responsible for all inheritance rights, obligations, and legal interests of VNCB. The new bank is responsible for re-writing and supplement bank regulations, which must be in accordance with law, and reforming its organizational structure in conformity with the Law on Credit Institutions and the provisions of other relevant laws. The decision takes effect from the day of signing.

Regarding personnel, Vietcombank will be involved in managing the new bank, sending Deputy Director Nguyen Van Tuan as chairman and two other leaders as deputy directors. Mr. Dam Minh Duc, General Director of VNCB, remains in his position.

Deputy Governor of the SBV Nguyen Phuoc Thanh said the central bank taking over VNCB at at price of VND0 per share is aimed at showing responsibility to the bank's depositors. He also said it does not represent nationalization.

The SBV will prepare VND40 trillion ($1.9 billion) in support for the new bank to operate as normal.

Other steps

On March 2, Deputy Governor Thanh said that the State Bank is considering but has not yet made a formal decision on purchasing GPbank and Oceanbank, also for VND0 per share.

He indicated that if GPbank and Oceanbank are unable to increase their capital by themselves the SBV will take them over, and that depositors can feel completely confident that their deposits are secure.

According to banking experts, in the context of restructuring in the banking system remaining incomplete, the SBV acquiring high negative capital commercial banks for VND0 per share is a correct move to ensure safety and remove any adverse effects spreading throughout the entire system.

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