Vietnam raises foreign bank ownership limit to 49%

Vietnam's government has increased the limit on foreign ownership for some banks from 30% to 49%. This change was made to help strengthen the banking sector by allowing greater investment from abroad. The new rule went into effect on Wednesday. It aims to attract more foreign capital and support the restructuring of struggling banks. Experts, like Tran Tuan Minh, believe this will encourage foreign investors to participate in rebuilding weak financial institutions. Earlier this year, the State Bank of Vietnam transferred two troubled banks to stronger institutions. Global Petroleum Bank (GPBank) was acquired by Vietnam Prosperity Joint Stock Commercial Bank (VPBank), and DongA Bank was taken over by Ho Chi Minh Development Joint Stock Commercial Bank (HDBank). Both GPBank and DongA Bank are now completely owned by their new parent banks. This follows the trend of bank consolidations, as two other distressed lenders were transferred to new owners last year. Vietcombank took over Ocean Bank, while Military Commercial Joint Stock Bank absorbed Construction Bank.