Talking to reporters of the local Newswire Bao Dau Tu, Dr Can Van Luc said there are many signs showing that cross ownership at banks have sharply decreased. That is the situation that a banker is both a leader at bank and at backyard businesses. Banks have strongly divested from other bank while most groups and state corporations divested from banking sector.
“At the recent annual general meeting of banks, many bank leaders had to resign from Chair of the Board, CEO of businesses. On the contrary, some business owners also had to give up the chairmanship at banks to meet the requirement of the revised Law on credit organisations. This is one of the most obvious examples of decreased cross-ownership”, said Luc.
So far, the situation that a leader both owns a bank and a backyard business is quite popular. However, in this year’s annual general meeting (AGM), a series of bank leaders such as Duong Cong Minh (Sacombank), Do Quang Hien (SHB), Do Minh Phu (TPBank) have resigned their positions as Chair of the Board of directors at businesses to devote wholeheartedly to banks. In contrast, Vo Quoc Thang (Kienlongbank), Vu Van Tien (ABBank) left banks when choosing to stay to manage businesses.
Currently, some groups and banks have cross ownership rate exceeding the regulation such as Vietcombank, Eximbank, MobiFone, VNPT, etc. However, these businesses are still making efforts to divest. Currently, Vietcombank has divested the entire capital from SaigonBank, OCB. In addition, 7-8 state-owned groups and corporation sold off directly owned finance companies to banks.
Also according to Luc, recently, banks have listed on the bourse in large number. The transparency of information is increasingly high, especially the transparency of internal management, ownership rate of shareholders. This helps the cross ownership be controlled better.
According to the data of the State Bank, the number of bank cross ownership pairs in 2017 remained two only (down five pairs from the two previous years), while bank ownership with businesses only remained two pairs compared to 56 pairs earlier. Though no updated data have been available, with the selection of either banker or business leader, certainly, the number of cross ownership pairs has been further reduced.
*Monitoring is still needed to prevent “underground” bosses
It can be seen that there are not many bank-bank or bank-business cross ownership pairs in the market now. However, a series of M&A deals and the wave of changing key leaders at many banks and groups caused many people to question: whether cross ownership has decreased or is becoming more sophisticated?
In fact, over the last period, some bankers shifted from Bank A to Bank B. However, personnel of these two banks had quite complicated “mix” then. The likelihood that a boss manipulates two banks is not exceptional. Besides, some bankers have relinquished the position as Chair of the Board or CEO of backyard business (especially real estate businesses), but the indirect management of these businesses is still very clear.
Therefore, Dr Nguyen Tri Hieu, finance and banking expert said though the Law on credit organisations had very good impact in the transparency of ownership, functional agencies still cannot ignore the supervision. In fact, in many cases, some individuals who do not obtain bank leadership right (even without a share at that bank), through a number of people, still has the power to govern that bank.
Looking at a more optimistic perspective, Dr Can Van Luc said most banks that have listed on the bourse have their information to be closely monitored by the State Securities Commission. Moreover, with the support of I.T, the State Bank and the Ministry of Finance may connect the computer system of banks to timely update data and correct.
Moreover, there should not consider the fact that a banker shifts to become leader of another bank and bring people from old banks to work there will lead to increased cross-ownership. In order to renovate a bank, a banker cannot do that but there must have a team. The fact that they choose qualified individuals from old banks to new banks is appropriate and easy to understand.
