Vietnam sets rules for selling banking shares to foreigners
HANOI - The State Bank of Vietnam stated in its latest regulation that commercial banks must have at least one trillion Vietnamese dong (VND) (62.5 million U.S. dollars) in equity if they want to sell shares to foreign investors, local newspaper Vietnam News reported Tuesday.
Besides the equity requirement, which has now been met by most of the banks, unlisted joint stock banks must have a non-performing loan ratio of no more than three percent when applying to sell shares to foreigners.
Other requirements are that the banks must have been profitable in the preceding year, members of its management board and supervision board must not seriously violate banking rules during their time in the positions, and they must operate proper internal auditing and supervisory systems.
Strategic investors must commit in agreements to assist their Vietnamese partners in developing banking products and services, and improve corporate governance and technology capacities, with a clear timetable of implementing the commitments.
In April, a Vietnamese decree raised the cap for shares held by strategic foreign investors in local joint stock banks to 15 percent from 10 percent previously, leaving it open for the prime minister to raise the limit to 20 percent on a case-by-case basis.
The decree, however, maintains the total foreign ownership ceiling at 30 percent, while the maximum stake a non-strategic foreign investor can hold remains at five percent for an individual investor and 10 percent for a foreign bank.
The state-owned Bank for Foreign Trade of Vietnam (Vietcombank) plans to offer both domestic and foreign investors shares totaling975 billion VND (60.94 million dollars), equivalent to 6.5 percent of its equity.
The exact date and other details of Vietcombank's initial public offering will be disclosed within this week, and the results will be made official before Dec. 26. The government approved the bank's final equitization plan last week.
By Sun Yunlong - Xinhua - December 4, 2007
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