EU investors will have opportunity to hold up to 49% charter capital at two Vietnamese banks under Vietnam’s commitments in the EU-Vietnam Free Trade Agreement (EVFTA). The offer will be valid for five years after the pact takes effect and it will apply only to joint stock banks, excluding BIDV, Vietinbank, Vietcombank and Agribank in which the Vietnamese government still holds controlling equity stakes. According to Vietnam’s existing regulations, the maximum foreign ownership in a commercial bank is capped at 30%.
Foreign investors have shown interest in the Vietnamese banking and financial market in recent years, given the country’s population of nearly 100 million with only 30% of them having access to banking services. This offer will accelerate EU investment into the Vietnamese banking and financial market. The offer will apply only to joint stock banks, excluding BIDV, Vietinbank, Vietcombank and Agribank in which the State still holds the controlling stakes.
The EVFTA was signed on June 30, 2019 in Hanoi, ratified on February 12, 2020 by the European Parliament, and expected to come into force after the ratification by the National Assembly of Vietnam in May 2020. The EVFTA is an ambitious pact providing elimination of almost 99% of custom duties between the EU and Vietnam. The FTA is expected to help increase Vietnam’s GDP by 4.6% and its exports to the EU by 42.7% by 2025.
(Sources: VietnamNews; Vietnam-briefing)
