Vietnam central bank rejects reports on financial companies

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The State Bank of Vietnam has rejected claims that non-bank financial institutions in the country will be eliminated, saying state-owned companies have only been asked to cut back their investment in the sector.

There have been some reports that the government will get rid of state-invested financial companies, but those reports are not true, the central bank was quoted as saying in a statement on the government's website.

According to the central bank, there are 18 financial companies in the country, including six foreign firms that provide consumer loans. All other companies are at least 25 percent owned by state enterprises.

In recent years, state-owned companies have mobilized too much capital for investments and expanded their business scopes, while their financial abilities are limited, the central bank said. "As a result, at the beginning of 2009, the government ordered state-owned enterprises to reduce their stakes in three sensitive areas: finance, banking and insurance."

Pham Quoc Doanh, deputy head of a steering committee for business reforms, said the government has ordered state-owned enterprises to focus on their major business activities and divest from other areas.

Financial companies owned by state enterprises will follow the same path, Doanh said, adding that the government can either withdraw its investment completely or sell its stakes.

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