HÀ NỘI — The Government plans not to license any more wholly foreign-owned banks in Việt Nam, instead encouraging foreign banks to buy weak domestic banks, Deputy Prime Minister Vương Đình Huệ said.

At a recent forum on mergers and acquisitions (M&A), Huệ said that many foreign banks are also interested in M&A deals with weak domestic banks.

The Vietnamese Government was speeding up the resolution and restructuring of the country’s credit institutions, Huệ said, adding that for commercial banks, the Government encouraged the M&A of small-sized banks into large-sized ones as the number of banks in Việt Nam is still quite large and a reduction is inevitable.

Earlier, the Government also said that it expected restructuring of the banking sector through more M&A would help Việt Nam have several major banks in the Southeast Asian region by 2021.

Besides, Huệ said, the Government will organise the equitisation and divestment of State-owned banks in the future.

According to Huệ, Agribank - one of Việt Nam’s largest banks - has an initial public offering (IPO) roadmap set for 2019 while the Government also plans to reduce the State capital at the two large banks of BIDV and Vietcombank through share sales to foreign and domestic investors.

“We have negotiated with some banks and partners who are interested in the deals, " Huệ said.

After a long period of staying quiet about M&A, some banks, including healthy ones, have recently revealed plans involving M&A.

At this year’s annual general meeting of shareholders in April, LienVietPostBank said that it was considering raising the charter capital, restructuring shareholders, completing a merger.

According to experts, M&A is an opportunity for banks to enhance financial capacity, expand markets and reach scale to achieve stronger growth. Besides, thanks to M&A, the Government does not have to exert much effort to handle the consequences of weak banks and help stabilise the financial market. — VNS