Vietnam's central bank said on Monday it will acquire all shares in a small, loss-making unlisted commercial bank based in the Mekong Delta.
The move by the State Bank of Vietnam (SBV) is part of efforts to help clean up the country's fragmented banking sector, which is weighed down with bad loans after a decade of rapid expansion.
All shares in the Long An province-based Vietnam Construction Bank will be taken by the SBV at no cost in order to "develop business operations more safely and more effectively", SBV said in a statement on its website. (sbv.gov.vn)
The Vietnam Construction Bank had "losses, bad debts and unstable operation", it said in a December 2014 proposal calling on shareholders to raise registered capital. The central bank said the plan had failed to win support from investors at a meeting last week.
The bank, one of the 10 smallest domestic lenders by assets, has stopped publishing annual reports since 2012.
Several mergers are expected this year in Vietnam's banking sector of 42 local lenders, which economists consider overcrowded, with too many small and undercapitalised operators.