State Bank is looking for investors to restructure SCB

Regarding the restructuring of the credit institution system associated with bad debt handling, the Government said that the State Bank has submitted and received approval from competent authorities for the compulsory transfer policy for four specially controlled banks.

Including Construction Bank (CBBank), Ocean Bank (OceanBank), Global Petroleum Bank (GP Bank) and DongA Bank (DongABank).

Resolutely restructuring weak credit institutions

Currently, the State Bank is directing relevant parties to carry out the following contents to submit to the Government for approval the restructuring plan of these banks according to prescribed procedures.

At the same time, resolutely direct banks to hire consulting organizations to determine enterprise value.

To date, valuation consulting organizations have issued valuation certificates and the State Bank has sent them to the State Audit to conduct an audit of the results.

Saigon Commercial Joint Stock Bank (SCB) has been placed under special control since October 2022. On that basis, the Government said that the State Bank has coordinated with ministries and branches to implement solutions. The goal is to ensure the safety of the banking system and protect the rights and interests of depositors.

At the same time, based on the overall assessment report of the current situation and proposed restructuring policy of SCB and the SCB Special Control Board, the State Bank is looking for investors to participate in restructuring SCB to submit to the Government for consideration and decision on the restructuring policy of SCB according to regulations.

According to the Government, joint stock commercial banks are focusing on consolidating and comprehensively rectifying financial, governance, and bad debt handling aspects, enhancing control measures to improve credit quality, business efficiency, competitiveness, and enhance transparency in operations.

However, the difficulty in restructuring credit institutions is the long process of finding and negotiating with commercial banks that are qualified to receive mandatory transfers (including poor financial capacity, management, and experience in restructuring credit institutions).

Many difficulties in implementation

The implementation process depends largely on the voluntary participation of commercial banks and requires time to convince shareholders, especially major shareholders and foreign strategic shareholders, to agree to participate in the mandatory transfer.

Policy mechanisms and financial resources to handle weak credit institutions and develop transfer plans are still problematic. Coordination and consultation with relevant ministries and sectors are still prolonged because handling weak banks is complicated and unprecedented.

Therefore, the Government said it will continue to direct the State Bank to coordinate with ministries and branches to urgently implement solutions to fundamentally handle weak credit institutions. Complete the mechanism for handling weak credit institutions, especially the draft Law on Credit Institutions (amended).