10 outstanding events in the banking sector in 2016

Le Minh Hung, the youngest governor in the history of the banking sector, took office in April 2016.




1. Beginning January 4, 2016, the central exchange rate mechanism was applied, under which the State Bank announces the dong/dollar exchange rate daily. On the first day, the exchange rate was VND21,896 per dollar.

The central exchange rate is determined based on three components – the basket of currencies, the supply & demand and the macroeconomic performance. The currencies for reference are the currencies of Vietnam’s major trade and investment partners and the currencies which have certain effects to Vietnam.

2. Le Minh Hung, born in 1970, the youngest ever governor of the State Bank, took office in April 2016.

Hung has an MA in Economics from Saitama University, Japan. He had many different posts at the State Bank of Vietnam before becoming Governor.

Hung is the son of the late Minister of Public Security Le Minh Huong.

3. MBBank received the central bank’s approval for lifting the foreign ownership ratio ceiling from 10 percent to 20 percent.

In 2016, Vietcombank and VietinBank asked for the permission to raise the foreign ownership ratio ceilings to 35 percent and 40 percent, respectively. The banks said they are facing hard pressure as they have to increase chartered capital when applying Basel 2 Accord.

4. Ten commercial banks have voluntarily applied Basel 2. They are Vietcombank, BIDV, VietinBank, ACB, MBBank, Sacombank, Techcombank, VP Bank, VIB and Maritime Bank.

One of the big challenges for banks in Basel 2 is increasing charter capital to improve CAR (capital adequacy ratio).

5. The initial decisions by BIDV to pay shares as dividends to its shareholders and by VietinBank not to pay dividends was strongly opposed by the Ministry of Finance, as the representative of the State, the biggest shareholder in the banks.

Finally, both banks had to pay dividends in cash. The State received VND2.767 trillion from BIDV and VND1.675 trillion from VietinBank.

6. Many customers complained that their money in bank accounts had vanished. These included three Vietcombank’s customers, one from VPBank and one from Agribank.

Vietcombank believed the customers accidentally released information and PIN codes during transactions.

7. Pham Cong Danh, former president of VNCB, and 35 other defendants were tried for behavior which caused damages of VND9 trillion to the bank.

8. Former CEO of Dong A Bank Tran Phuong Binh and other officers, including former deputy CEO Nguyen Thi Ngoc Van, were arrested.

9. Eximbank and Sacombank unsuccessfully organized a 2016 shareholders’ meeting because of a disagreement among big shareholders.

10. The VND30 trillion credit package ended its historic mission. The disbursement stopped on December 31 after three years of implementation.

Le Ha / vietnamnet