No limit to foreign-ownership in weak banks: SBV The government of Vietnam is considering raising the ceiling on foreign ownership in weak banks which are undergoing restructuring, Deputy Governor of the State Bank Nguyen Phuoc Thanh said.   Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Phuoc Thanh, in an interview to the local press, said foreign capital was considered an important resource to restructure the Vietnamese banking system, especially in dealing with weak banks. Under government Decree No 01, foreign investors can hold up to 30 percent of the joint stock credit institutions’ chartered capital. Meanwhile, the highest possible foreign-ownership ratios in Vietnamese weak banks which undergo restructuring will be determined by the Prime Minister. This means that there is no limitation on proportions of shares foreign investors can hold in the weak reshuffled credit institutions. In such exclusion cases, they can buy more than 30 percent of bank shares, while the foreign ownership ratios will be determined by the Prime Minister. This means that if foreign investors accept to take over weak banks, they will have preferential treatment, to be offered in specific cases. One year ago, rumor had it that GP Bank, one of the nine weak banks which was forced to undergo restructuring in the first phase of the national bank restructuring program, would be sold to a Singaporean bank, UOB. Local newspapers then quoted an official of the State Bank as saying that the foreign banker would buy 100 percent of the Vietnamese bank’s shares and turn it into a foreign bank. However, there has been no further information about the deal. Some sources said the deal failed completely because the foreign investor felt it would not receive enough preferences for taking over the weak bank. SBV’s officials, at recent meetings with the local press, said that the central bank would intervene in the weak banks’ restructuring process by forcing them to merge with other banks. They also stated in local media that the first half of 2015 would be the peak time for bank restructuring and many merger and acquisition deals would be made during that time. Analysts commented that the statements showed SBV’s strong commitment on the weak banks’ restructuring. The large banks, in which the State holds controlling stakes, have been officially asked to admit weak banks. Meanwhile, the central bank has released an “ultimatum” to commercial banks that within the first six months of the year, they need to settle 60 percent of the bad debts they are going to deal with in 2015, and sell at least 75 percent of the bad debts they are going to sell to the Vietnam Asset Management Company (VAMC). Phuoc Ha, VNN