The central bank Thursday suspended the general director of DongA Bank and his deputy, a week after placing the partly private lender under special surveillance for "various violations."
As replacement for Tran Phuong Binh, it has named as general director Vo Hai Nam, currently director of risk management at the Bank for Investment and Development of Vietnam (BIDV).
Pham The Nguyen, deputy director of a BIDV branch in Ho Chi Minh City, replaces Nguyen Thi Ngoc Van as deputy general director.
The State Bank of Vietnam announced the top management change in a statement August 14, when it said executives from BIDV, the country's largest partially private bank by assets, would come in to turn things around at DongA.
“Inspections have turned up many violations in financial and credit management at DongA in 2012 and earlier, which have severely affected the operations of the bank.”
The Ho Chi Minh-based lender, whose assets are valued at nearly VND90 trillion (US$4.07 billion), has been one of the best-performing banks in Vietnam during its 23 years in business, and one of the pioneers in automated banking services.
It was never part of the government’s banking restructure plans until its 2014 financial report showed a 96 percent drop in profits from the previous year to a mere VND35 billion ($1.58 million).
Binh, before his sacking, told the media he was seeking government permission to sell a 49 percent stake in the bank to foreign funds to raise money for restructuring. In Vietnam, foreign ownership of domestic banks is capped at 30 percent.
He admitted the bank’s bad debts had at times been as high as 6 percent of loans.
He told news website VnExpress that the central bank’s announcement it was placing the bank under surveillance caused a run on the bank, with withdrawals between August 14 and 18 totaling VND15.4 trillion ($688.8 million), or VND4.8 trillion ($215.9 million) more than deposits during the period.
Customers also withdrew more than 7,400 ounces of gold, he said.
“We managed to return the money and the gold ourselves. We have not had to borrow from the central bank or others.”
The 56-year-old, once an economics lecturer, has been with DongA since its inception. He became general director in 1998.
His family owns 9.62 percent of the bank’s shares.