The State Bank of Vietnam (SBV) has put more restriction on strategic investors in state banks being privatized, the central bank said in a circular released late on Tuesday.
Specifically, foreign investors seeking to buy 15% or more of a Vietnamese state-owned bank must have total assets of at least $20 billion in the year before they buy a stake ; over 5 years experience in global market, and pledge to maintain operations even when domestic economic conditions turn out unfavourable.
“The government wants to protect state assets because state-run banks have huge assets, many of which are not profitable now,” a Vietnamese analyst was quoted by Reuters.
Meanwhile, domestic investors seeking to sign strategic partnership agreement with state-owned banks were required to have minimum total assets of VND3trillion in the year before they buy a stake; ROE above 15% and ROA above 1% one year before the deal.
Especially, local lenders must meet additional requirements including ensure Capital Adequacy Ratio (CAR) of above 10% and capping bad debts at 2% in the year before the deal.
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