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Official Gazette

Wednesday, April 1, 2020

DECREE No. 69/2007/ND-CP:

Updated: 11:13’ - 08/05/2007

This April 20 Decree provides for foreign investors’ purchase of shares of Vietnamese commercial banks (Vietnamese banks), which are not yet listed in the securities market.

It applies to equitized state commercial banks, joint-stock commercial banks, foreign investors, and relevant organizations and individuals.

When a Vietnamese bank is listed in the securities market, foreign investors may purchase shares of that bank in accordance with the law on securities and securities market.

The Decree says foreign ownership ceiling in a Vietnamese bank is 30% of the charter capital of that bank. This ceiling rate is 5% for a foreign investor other than a credit institution; 10% for a foreign credit institution; 15% for a strategic foreign investor.

In special cases, the Prime Minister may, at the proposal of the State Bank of Vietnam (SBV), decide to allow a strategic foreign investor to purchase more than 15% stake in a domestic bank, which, however, must not exceed 20% of the charter capital of that bank.

When a foreign credit institution holds convertible bonds, the conversion of bonds into stocks must ensure the above share ownership percentage.

The share ownership limit for foreign credit institutions in an equitized state commercial bank shall be the same percentage as the limit for Vietnamese banks at that state commercial bank.

A foreign credit institution may become a strategic investor of only one Vietnamese bank and take part in Managing Boards of two Vietnamese banks at most.

To sell shares to foreign investors, a Vietnamese bank shall fully satisfy the following conditions:

- Having the charter capital of at least VND 1 trillion;

- Having a healthy financial situation meeting relevant conditions of the SBV;

- Having an efficient administration apparatus as well as inspection, control and internal audit systems; and,

- Having not been sanctioned for violations of the regulations on safety in banking operations for 24 months counting to the time the SBV makes consideration.

To purchase shares of Vietnamese banks, a foreign credit institution shall fully meet the following conditions:

- Having the total minimum “Credit” assets equivalent to USD 20 billion in the year preceding the year of registration of share purchase;

- Having international banking experience;

- Being internationally ranked as capable of fulfilling financial commitments and carrying out normal operations even in case of unfavorable economic conditions.

Strategic foreign investors shall, apart from meeting the above conditions, make written commitments on support to Vietnamese banks in developing banking products and services, improving administration capacity and applying modern technologies.-

VNL_KH1 

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