The hallmarks of the banking sector in 2017
2017 was a good year for Vietnam’s banking sector with big profits for many banks and a decreased bad debt ratio.
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The amended Law on Credit Institutions which takes effect on January 15, 2018 mentions five measures to restructure the credit institutions put under special control, including bankruptcy.
To date, bank bankruptcy has never occurred in Vietnam.
2. NA releases resolution on bad debt settlement with drastic measures
After the resolution was released, VAMC has put many assets into auction to get money to collect debts. The first deal was the sale of Saigon One Tower in district 1, HCMC, to deal with the VND7 trillion worth of debt incurred by a group of clients.
Agribank has offered to sell V-Ikor Tower, while Sacombank wants to sell the land use rights in Duc Hoa III IZ.
3. SBV releases new circular on lending
Since March 15, credit institutions have to follow the new lending policy stipulated in Circular 39 which says borrowers must be legal entities and individuals. As such, households no longer can borrow money from banks.
4. SBV eases prime interest rate by 0.25%
Since July 10, 2017, the central bank cut refinancing, rediscount and overnight interest rates by 0.25% in an effort to stimulate economic growth.
SBV last made such a decision in March 2014.
5. Foreign banks leave Vietnam
Some foreign banks left in 2017 after many years of being shareholders in Vietnamese banks.
HSBC divested all of its Techcombank stake which accounted for 19.41% of the bank’s charter capital.
Prior to that, ANZ sold 9.61% of Sacombank shares in 2012 and OCBC sold 15% of capital it contributed to VP Bank in 2013.
6. Cross-ownership cleared
A series of banks divested their capital contributions to other banks as per SBV’s request.
Vietcombank withdrew capital from Saigon Bank and is planning to withdraw capital in MB and Eximbank in 2018. Meanwhile, Eximbank is withdrawing capital from Sacombank. It has sold 5 million Sacombank shares to reduce the ownership ratio from 9.16% to 8.887%.
7. Forex reserves reach record-high
SBV Governor said at the NA session in November that the forex reserves had reached US$46 billion, or US$7 billion higher than earlier this year. On December 21, the figure rose to US$48 billion.
8. Death sentence for defendant in Ocean Bank case
Former Deputy Governor of the State Bank Dang Thanh Binh was prosecuted for ‘irresponsibility that causes serious consequences’.
Nguyen Xuan Son, former CEO of Ocean Bank, received a death sentence.
