Encourage mergers and acquisitions

This content is part of the Project on restructuring credit institutions associated with bad debt settlement in the 2021-2025 period, which has just been signed by Deputy Prime Minister Le Minh Khai.

The specific objective of the project is to pilot Basel II by advanced method, striving for the capital adequacy ratio (CAR) of the pilot banks to reach at least 10-11% by 2023. By 2025, the CAR of banks applying Basel II will be increased to at least 11-12%, towards the development level of the group of 4 leading ASEAN countries.

To achieve this goal, the project proposes a number of solutions to restructure credit institutions. In which, banks develop plans and implement appropriate solutions, including increasing charter capital, raising capital adequacy ratio, and improving governance and management capacity. At the same time, the scheme encourages banks to participate in the purchase, sale, consolidation and merger of credit institutions on a voluntary basis in order to increase the scale, scope of operation and competitiveness.

Based on monitoring and evaluation data of independent auditors, banks and financial companies will be classified into three groups, including those with large-scale financial potential; small- and medium-sized groups, and weakly and weakly operating groups, with many potential risks.

By 2025, a group of banks with financial potential and large scale must reach a minimum charter capital of VND 15,000 billion. The group of small and medium-sized banks and banks with foreign capital has a minimum charter capital of VND 5,000 billion. For financial companies, the minimum charter capital must reach 750 billion VND.

Meanwhile, the weak and weak groups implement the plan to restructure and increase capital approved by competent authorities and must strengthen internal inspection and control in order to promptly detect, prevent and handle risks. ro.

Regarding bad debts, banks must assess the quality and recoverability of debts in order to take appropriate measures, set up and use risk provisions to handle bad debts in accordance with regulations. . The goal is that by the end of 2025, the ratio of bad debt on the balance sheet, bad debt sold to VAMC, unresolved and potential debt, will be below 3% (excluding weak banks).

Today, at the question-answer session of the National Assembly, Governor of the State Bank Nguyen Thi Hong said that there is a plan to handle 0-dong banks.

In the previous report to the Standing Committee of the National Assembly, the Government said that it has implemented many solutions to handle 3 banks with compulsory acquisition (CBBank, OceanBank, GPBank) and Dong A Bank.

Measures taken include looking for partners, negotiating with investors who wish to participate in the bank’s restructuring, at the same time, rearranging the operating network, reducing costs, and implementing activities. safe business…

Minh Son