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|Citibank is seeking permit for a wholly owned, locally incorporated subsidiary in Vietnam|
Citibank announced its willingness to open a 100 per cent foreign bank in Vietnam after submitting its application. Citibank country officer for Vietnam Brett Krause last week said the bank expected to receive a licence next year.
The Vietnamese government might change its intention, giving licence to a sixth wholly foreign bank after two years keeping the number of such banks at five, namely HSBC, SCB, ANZ, Shinhan Bank Vietnam and Hong Leong Bank.
The second possibility of establishing a wholly foreign bank in Vietnam is Malaysia’s Public Bank Berhad, a partner in VID Public Bank. BIDV, the local partner in this joint venture bank, has expressed its determination to sell its stake. VID Public Bank currently has limited lines of customers from Malaysia and Singapore and its remaining customers are locals.
“We do not want to maintain our stake in this bank. The central bank’s one-year deadline extension for raising chartered capital to at least VND3 trillion means that the foreign partner will not have to respond to our stake selling offer until next year,” said a BIDV source.
If Malaysia’s Public Bank Berhad is not willing to acquire BIDV’s stake, BIDV will sell its stake to other foreign investors and turn this joint venture bank into a joint stock bank.
VID Public Bank has yet to submit a proposal to the central bank to triple its chartered increase to VND3 trillion ($154 million).