HÀ NỘI — The State Bank of Việt Nam yesterday terminated Trầm Bê’s and Trầm Khải Hòa’s membership in the management board at Sài Gòn Thương Tín Joint Stock Commercial Bank (Sacombank).

The central bank’s decision was made based on the banking system restructuring plan in the period 2011-15, and the restructuring plan for Sacombank, which aims to terminate the cross-ownership status in the banking system and improve the health of the financial market.

The decision was made after Trầm Bê and his son, Trầm Khải Hòa, sent proposals to the SBV volunteering to remove themselves from the Sacombank management board.

The two former members will have to settle remaining problems at Sacombank in compliance with current regulations.

SBV will ask Sacombank to organise its annual general shareholder meeting in April to complete the bank’s management and administration structure and continue implementing its restructuring solutions to assure the rights and benefits of depositors, stabilise the bank’s operation and make sure the financial system is secure.

During the bad debt restructuring and settlement process of the post-merger bank, Trầm Bê also committed to supplement his other assets if the value of guaranteed assets at Sacombank and Southern Bank are not enough to make compensation for his debts.

Trầm Bê and his son, Trầm Khải Hòa, used to be the members of management board at Sacombank and Phuong Nam Joint Stock Commercial Bank (Southern Bank) before Sacombank acquired Southern Bank in October 2015. The post-merger bank was named Sacombank.

After the merger of the two banks, Trầm Bê and Trầm Khải Hòa gave up their authority, including shares and voting rights in the new Sacombank, to the SBV.

Forfeiting their power has remained a mystery for the finance-banking circle, but the two persons no longer ran the bank operation.

Before the merger, Southern Bank was one of the banks that were required by the SBV to be restructured. A SBV report said that Southern Bank had a bad-debt ratio of 45.6 per cent on June 30, 2012; the figure increased to 55.3 per cent at the end of November 2013.

After the merger, Sacombank has performed worse; the bank has to bear the bad debts transferred from Southern Bank. In 2016, the bank earned VNĐ531 billion (US$23.6 million) in pre-tax profit, a year-on-year decline of 64 per cent from 2015’s results. — VNS