Central bank seeks investor to take over ailing Saigon Commercial Bank

By Hoai Thu   October 9, 2023 | 09:07 pm PT
Central bank seeks investor to take over ailing Saigon Commercial Bank
Customers at an SCB branch in Ho Chi Minh City. Photo courtesy of SCB
The State Bank of Vietnam is looking for a bank willing to acquire Saigon Commercial Bank (SCB).

When one is found, the central bank will submit a plan for the restructuring, the government has told the National Assembly (NA).

After SCB faced a run in October 2022, the central bank put the private lender under special control to limit negative impacts on it and credit institutions in general.

Many banks have been placed under special control in the past, but all have recovered and even thrived.

In April Prime Minister Pham Minh Chinh had sought a plan from the central bank for restructuring ailing banks, including SCB. He said the restructure should be transparent and "prevent asset losses."

Also according to the government’s report to the NA, four other lenders placed under special control, CBBank, OceanBank, GP Bank, and DongABank, will be compulsorily sold.

They are required to hire consultants to determine their valuation before being sold to stronger banks.

According to the government, it takes time to find banks willing to acquire ailing ones and the mechanisms and financial resources needed to carry out the transaction.

Mechanisms for handling ailing credit institutions are expected to get a fillip when the Law on Credit Institutions is amended possibly at the NA session at the end of October.

The amendments include provisions for improving risk management at banks and their operating capacity.

go to top