Many chairpersons of banks have left their hot seats since the beginning of the year until now. Most recently, Nguyen Thi Nga, Chairwoman of Southeast Asia Commercial Joint Stock Bank (SeABank) for the last 11 years, has “gave up” this position to the bank’s general director Le Van Tan. Nga’s daughter Le Thu Thuy replaced Tan, holding the position of Acting general director of SeABank. Despite leaving the chair, Nga is still a member of SeABank’s Board of directors (BOD).
Previously, Vu Van Tien, Chair of BOD of An Binh Commercial Joint Stock Bank (ABBank) also resigned to continue his chair position at Geleximco Group and some other companies. The new Chair of ABBank’s BOD is Dao Manh Khang, Tien’s brother-in -law.
It is easy to see that at the recent annual general meeting (AGM) season, many bank owners left their chairs at banks or enterprises, but are replaced by a family member or a very close one, such as the cases of Do Quang Hien (Saigon Hanoi Commercial Joint Stock Bank, SHB), Duong Cong Minh (Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), Nguyen Tien Dung (National Citizen Commercial Joint Stock Bank (NCB), and Do Minh Phu (Tien Phong Commercial Joint Stock Bank, TPBank), etc.
Talking to reporter of Bao Dau Tu, banking expert Phan Minh Ngoc said that the cross-ownership situation just temporarily sunk but not really declined. The fact that the State Bank of Vietnam (SBV) does not allow bank owners to concurrently own a business does not mean much to the reduction of cross-ownership, because they can go around the rule if they want.
In fact, some owners, despite holding a key position, still can run the bank.
An economic expert, after viewing the list of shareholders of a joint stock bank released in the recent AGM, said that he was surprised when finding that the proportion of shareholders who are related to each other owned 70-80 percent of the bank’s stake. According to this expert, up to now, the regulations on share ownership and on related persons of SBV still only prevent cross-ownership in formal aspect. Due to the lack of transparency, it is very difficult to find out the real owner standing behind the groups of shareholders and SBV cannot yet sign with relief regarding cross-ownership.
During the talk with Bao Dau Tu’s reporter, leader of a joint stock bank admitted that the cross-ownership, in some cases, has actually not decreased or even increased. But the good news is that SBV has fully identified and gradually overcome the situation.
According to finding of Bao Dau Tu, for some restructuring banks, the ownership rate of the new groups of shareholders may have exceeded the limit, if fully counted the related persons.
Answering reporter about this issue, Dr Le Xuan Nghia, an economist, said that the restructuring of banks need new owners who are willing to invest capital, to make things done, and to take responsibility. “These new owners must have a decisive voice to ensure their restructuring strategies are successfully implemented. Therefore, in the restructuring context, although the real ownership rate of some groups of major shareholders may have been higher than the allowed limit, we should accept it in order to have resources for the success of bank restructuring”, said Nghia.
The fact shows that although Export Import Commercial Joint Stock Bank (Eximbank) has no group of shareholders owning shares at excessive rate, it has not managed to complete the restructuring satisfactorily. One of the causes could be that the bank has too many groups of shareholders and no group has decisive voice, causing complex internal conflict and no common voice is achieved.
Obviously, in the short term, cross-ownership cannot be completely eliminated and may continue to last in the current transitional period. However, according to experts, after weak banks overcome the difficult time and the health of the system improves, SBV should supplement regulations to disassociate the cross-ownership spider, because in fact, cross-ownership is still hidden, particularly in the relationship between banks and subsidiaries.
