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Gov't to take over GP.Bank if it does not meet capital requirement

Update: July, 04/2015 - 10:32

A transaction is conducted at GP.Bank in Viet Nam. The bank is one of the weak lenders that will need to be managed for the next three years. — Photo

HA NOI (VNS) — Global Petro Bank, or GP.Bank, is likely to be nationalised if it fails to meet a legal capital requirement by tomorrow.

GP.Bank has been named among weak lenders who need to be managed for three years, after a national plan was kicked off to restructure the banking sector.

It has been placed under special government supervision, following its inability to achieve a minimum bank equity of VND3 trillion (US$142.86 million) as stipulated by the law.

The bank said in an online notice on June 4 that it would hold an irregular shareholders meeting within 30 days, following an order from the State Bank of Viet Nam (SBV) to vote on a charter capital supplement.

"In case a capital supplement cannot be accomplished as ordered, the SBV will handle the issue in accordance with the law," the notice said.

GP.Bank managed to organise the third shareholders meeting on July 2, after failing twice earlier to gather enough shareholders who could be qualified for a vote.

However, on July 2, the majority of shareholders rejected the capital increase proposal of the bank's management board, according to local press reports.

Audited financial reports revealed that the bank suffered a cumulative loss of VND12.28 trillion ($584.76 million) and its ownership capital was about minus VND9.20 trillion ($438.10 million) as of early April.

Its bad debt ratio was at a record high of 45.37 per cent, while its outstanding loans totalled only VND6.67 trillion ($317.62 million).

An unidentified official of the SBV has reportedly affirmed that the central bank will likely acquire GP.Bank at a price of zero dong per share, if GP.Bank fails to meet the capital requirement by the end of July 4, or tomorrow.

VnExpress online said the former head of major lender Vietinbank's supervisory board, Tran Thi Le Nga, has been designated as a representative of GP.Bank after a line of officials of the weak bank had been suspended.

All the legal rights and interests of existing depositors at GP.Bank will be reassured.

This year, the SBV has already acquired Viet Nam Construction Bank and Ocean Bank for similar reasons. — VNS

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