The State Bank of Vietnam (SBV) late last week dispatched many senior officials of the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) to take over the most important roles in the loss-making Vietnam Construction Joint Stock Commercial Bank (VNCB) after the SBV acquired it earlier this month.

As announced by the Department of Organization and Personnel under the central bank, Nguyen Van Tuan, former deputy general director of Vietcombank, was appointed the new chairman of VNCB’s board of directors.

Other officials from Vietcombank, the fourth biggest bank in Vietnam by assets with VND530.22 trillion (US$24.9 billion), were also assigned to take many important positions at VNCB with a common term of five years.

Pham The Tuan, former deputy director of the Ho Chi Minh City branch of Vietcombank, and Tran Trung Tuong, deputy director of its Northern Saigon branch, were named members of VNCB’s board of directors.

Meanwhile, Nguyen Quang Minh, deputy director of the Tien Giang branch of Vietcombank, was chosen as vice general director of VNCB.

Two VNCB officials Dam Minh Duc and Pham Van Dat retained their old posts as general director and vice general director.

The SBV has also issued a decision on realizing Vietcombank’s participation in the management and administration of VNCB following its request to the state-run bank earlier this month.

Nghiem Xuan Thanh, chairman of Vietcombank’s board of directors, said the lender had previously reported to the central bank on the restructuring plan of VNCB and already received consent from the SBV.

The SBV said it will submit the plan to Prime Minister Nguyen Tan Dung for final approval. 

"With almost 100 percent of key personnel transferred from Vietcombank, it is entirely feasible for VNCB to return to normal operations with the participation of such highly qualified human resources,” Thanh said

Nguyen Phuoc Thanh, deputy governor of the SBV, told Tuoi Tre (Youth) newspaper that the central bank will offer VND40 trillion ($1.88 billion) to help normalize VNCB operations.

This was the first time the central bank had officially changed the operational model of a weak joint-stock commercial bank to a bank with 100 percent state capital.

On February 3, the SBV asked Vietcombank to manage and operate the debt-laden VNCB after it took over the bank one day earlier.

The participation of Vietcombank will ensure the smooth implementation of the restructuring process, according to the SBV.

The SBV’s move followed the failure of VNCB shareholders to supplement more funds to ensure the real value of the bank’s minimum charter capital of VND3 trillion ($141 million).

According to Deputy Governor Thanh, the SBV will continue to acquire a 100 percent stake in two joint-stock commercial banks to restructure them.

Last week Thanh told the government website chinhphu.vn that the SBV is considering taking over other loss-making local financial institutions, including the unlisted GP.Bank and Ocean Bank.

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