Wednesday, December 25, 2024 10:39:42 PM - Markets closed
VN-INDEX 1,274.04 +13.68/+1.09%
HNX-INDEX 229.81 +1.45/+0.63%
UPCOM-INDEX 94.59 +0.57/+0.60%
VN banks more open for EU investors under newly-approved trade pact
Vietnam News - 2/15/2020 8:34:22 AM
 (0 ratings. You must sign in to rate.)
Investors from the EU will have opportunities to own higher stakes in Vietnamese banks than those from other countries under Việt Nam’s commitments in the EU-Việt Nam Free Trade Agreement (EVFTA).
 
Under the EVFTA signed this week by the European Parliament, Việt Nam and the EU have committed to facilitate the investment environment for businesses of the two sides, in which the first will allow the latter’s investors to enjoy an exception – holding up to 49 per cent charter capital at two Vietnamese banks.
 
According to Việt Nam’s existing legal regulations, the maximum rate of foreign ownership in a commercial bank is capped at only 30 per cent.
 
The offer will apply only to joint stock banks, excluding BIDV, Vietinbank, Vietcombank and Agribank in which the State still holds the controlling stakes.
 
The offer will be valid for five years after the pact takes effect. After the five-year deadline, the offer expires, and any proposals will be rejected.
 
The implementation must also comply with all of Việt Nam’s current regulations on procedures for mergers and acquisitions as well as safe and competitive conditions, including limits on the shareholding ratio applicable to each individual and institutional investor on the basis of national treatment. Currently, the stake owned by an individual foreign investor in a Vietnamese bank is capped at 5 per cent and the maximum rate for a foreign institutional investor is 15 per cent.
 
Experts believed European investors would eye banks which have some good criteria, such as clearing bad debts, focusing on core credit activities and meeting the State Bank of Việt Nam’s standards.
 
In the list of top ten joint stock banks released last year, Techcombank, VPBank, and ACB took the leading positions, followed by TPBank, SHB, HDBank, Sacombank, VIB, MSB and SCB.
 
Foreign investors have shown interest in the Vietnamese banking and financial market in recent years, given the country’s population of nearly 100 million with only 30 per cent of them having access to banking services.
 
Banking expert Nguyễn Trí Hiếu told Việt Nam News that while it was hard for investors to own wholly foreign owned banks in Việt Nam, especially after the Government stopped issuing new licences for the establishment of wholly-owned foreign banks in the country, the best option for foreign investors to enter the Vietnamese market now was through mergers and acquisitions (M&A) with local banks and financial firms.
 
“In the current context, the most common way for foreign investors to enter the Vietnamese financial market is to acquire stakes in local banks or buy financial companies instead of establishing new ones,” Hiếu said, adding M&A would also help reduce many legal and procedural difficulties for foreign investors.
 
“Therefore, instead of paying a huge amount and spending a lot of time establishing a new company, M&A with local partners has more advantages, especially when local banks are also expecting to raise capital from foreign shareholders to meet the central bank’s stricter capital requirements due to the underdevelopment of the domestic capital market,” Hiếu explained. VNS
 
Read original article here
Newer News
17/12 F88 partners with MB to transform over 850 financial stores into bank transaction offices
16/12 Five banks qualify for year-end credit expansion
16/12 Lending interest rates this year reduced by 0.44 pp compared to 2023
16/12 Many banks increase deposit interest rates in the year-end period
13/12 VN to regulate digital assets with digital law
13/12 Banks face difficulties in balancing capital raising and lending
10/12 Dialogue on tax and customs policies to ease business operations
10/12 Bank capital contribution needs investigation to prevent cross-ownership
09/12 More tax law reforms needed to address e-commerce challenges
05/12 PM direction to promote credit management solutions
Older News
15/02 Real estate firms dominate bond issuance in January
14/02 Reference exchange rate up 9 VND on February 14
13/02 Reference exchange rate down 2 VND on February 13
11/02 Reference exchange rate up 6 VND on February 11
10/02 Reference exchange rate up 10 VND at week’s beginning
06/02 Reference exchange rate up 5 VND on February 6
05/02 Reference exchange rate down 10 VND on February 5
03/02 Reference exchange rate up 5 VND at week’s beginning
31/01 Reference exchange rate up 11 VND on January 31
30/01 Reference exchange rate up 15 VND on January 30
 
Newsletter Signup
Top Stories
VCCI recommends mineral mining rights be granted through auction and bidding
Central bank works to raise interbank rates and ease forex market
Inflation a concern following salary increases
National Council for Sustainable Development established
Việt Nam, Cambodia look forward to $20 billion trade
Market Update
Last updated at 3:05:02 PM
VN-INDEX 1,274.04 +13.68/+1.09%
Real-time chart
Top 5 Actives
Top 5 Gainers
Top 5 Losers
My Favorite Quotes
Company Research
Type in the symbol above for thorough background information, key statistics and financial information.
Stock Sectors
We continuously improve our services, here are the latest updates...
Portfolio
Allow you to monitor a customised group of securities. You can set up multiple Portfolios to help you better manage your investments.
Trigger Alerts
Get up-to-date alerts delivered directly to your email address.
Stock Screener
Allow you to filter the market and find exactly what sort of company you are looking for.
Live Terminal
Get instant access to FREE REAL-TIME streaming quotes for hundreds of stocks from HOSE, HNX and UPCOM exchanges.