Japan-based J Trust Corp will buy a stake in Construction Bank for an undisclosed amount.
Foreign financial institutions are taking an interest in Vietnam’s struggling banks after the government’s move to allow foreigners to acquire stakes in local institutions to hasten the restructuring of the country’s banking sector, reports Viet Nam News.
Construction Bank (CB), which is a state-owned bank plagued with an inability to battle soaring bad debts, has lured the Japanese financial group J Trust Corp to acquire a stake in the bank. According to Nobiru Adachi, senior managing director of J Trust, the Japanese firm wants to take part in the restructuring of CB and to support the bank to boost technology and financial operations.
Meanwhile, during a meeting with the State Bank of Vietnam (SBV) governor Le Minh Hung, Richard Chandler, chairman of Singapore-based Clermont Group, had also revealed that they are interested to invest in Vietnamese banks. Clermont Group has been involved in bank restructuring and bad debt settlement in Brazil, Russia, Japan and India.
Sources from SBV have also noted that a potential foreign investor was willing to acquire state-owned OceanBank.
According to banking expert Nguyễn Trí Hiếu, the government wanted to speed up the recovery of ailing banks.
“The Vietnamese financial market holds a lot of potential, but licence applications to establish a bank are very difficult, so purchasing shares in local banks or acquiring a 100% in ailing institutions are the best options for foreign investors,” Hiếu told Việt Nam News.
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