The manipulation and control of banks by major shareholders or groups of shareholders have been addressed, and have significantly decreased compared to previous periods.

A report from the State Bank of Vietnam (SBV) to the National Assembly before its 9th session indicates that the excessive share ownership proportion (higher than 5 percent) has declined significantly.

Shareholding exceeding 5% in other credit institutions has notably declined.

Excessive share ownership now mostly exist in state-owned enterprises and general corporations.  SBV said it will continue to handle the problem in order to gather capital for core business fields and more effectively use capital.

Most cases of holding more than allowed ownership ratios arose before the Law on Credit Institutions 2010 took effect.

The 2024 Law on Credit Institutions imposes stricter regulations on shareholding. Accordingly, credit insitutions with shareholding levels exceeding the limits set by the 2024 law have to continue to develop roadmaps to ensure compliance with the law and related SBV guidelines.

However, SBV highlighted difficulties and obstacles in detecting, preventing, and addressing cross-ownership and manipulative or controlling shareholding in credit institutions.

Specifically, controlling cross-ownership is challenging when shareholders and their related parties deliberately conceal their ownership by having individuals or organizations hold shares on their behalf to bypass regulations.

This creates a risk of opaque and non-transparent operations in banks, which can only be detected and identified through investigations by competent authorities.

Determining ownership relationships between enterprises, especially non-public ones, remains difficult due to a lack of transparency in information. 

SBV faces challenges in accessing information and verifying the accuracy and reliability of data sources, particularly in the context of rapidly developing stock markets and technology.

Cross-ownership may involve multiple entities under the management of various ministries and sectors. Notably, state-owned enterprises holding significant shares in commercial banks beyond permitted limits pose challenges for banks in requiring these shareholders to divest.

SBV stated it would continue to supervise the operations of credit institutions and conduct inspections on capital, shareholding status, lending, investment, and capital contribution activities. If risks or violations are detected, SBV will direct commercial banks to address these issues to mitigate risks.

SBV affirmed that it would continue planned inspections or conduct unscheduled inspections (if necessary), focusing on shareholding ratios, share trading and transfers, and credit provision to large customers or customer groups (including loans and corporate bond investments). 

Tuan Nguyen