Vietnam will now allow foreign investors to hold bigger stake in its banks. The new rule comes as a bid to boost the nations' ailing bank system, according to Bloomberg.
Based on a statement posted on the government website yesterday, the limit for foreign strategic investors will be increased to 20% from 15%. However, the limit for total foreign ownership at any local lender remains at 30%, the statement said. In special cases, the prime minister can lift the caps to help weak banks in their restructuring, according to the decree. The said decree is effective February 20, the report explained.
Bank shares soared today on belief that the new steps will assist Prime Minister Nguyen Tan Dung's government remodel the financial system. The said system is saddled with the highest bad debt rate in the whole Southeast Asia. The International Monetary Fund said the undercapitalized lenders of Vietnam are struggling with weak structures that need immediate fixing, the report detailed.
Separately, Prime Minister Dung is mulling raising foreign ownership limits at listed firms as well, Bloomberg reported.
Join the Conversation