Vietnam's central bank said on Tuesday it would take over all shares in troubled lender Global Petro Bank because of its failure to restructure, making the third such move this year to consolidate the country's fragmented banking sector.
The State Bank of Vietnam (SBV) would nationalise Global Petro Bank (GP.Bank) because it had exhibited serious risks and management weakness and had failed to find a partner, or devise a feasible reform plan in the past three years, the SBV a statement.
"The direct buy-out of all GP.Bank shares is to help SBV become fully proactive in further reforming GP.Bank, ensure the safety and stability in banks and help maintain political security and social order and safety," the SBV said.
VietinBank, Vietnam's second biggest partly private lender by assets, has been appointed to join the management of GP.Bank, SBV said.
Hanoi-based GP.Bank, by assets, is among the smallest of Vietnam's nearly 40 partly private lenders.
In January, the SBV said it expected six to eight mergers and acquisitions in 2015 to strengthen a sector that was blighted by bad debt that had mounted up due to a real estate slump, risky lending and costly investments by state-run firms.
Bad debts in Vietnamese banks by February accounted for 3.59 percent of their outstanding loans, up from 3.49 percent in the previous month. The government's aim is to get the ratio to under 3 percent by end-2015.
Earlier this year the central bank took over loss-making Vietnam Construction Bank and assigned Vietcombank, the nation's top lender by market value, to join its management. It also appointed VietinBank to run Dai Duong (Ocean) Commercial Bank after acquiring the lender.
SBV has also allowed three mergers among six domestic banks, including Hanoi-based BIDV, Vietnam's biggest partially private lender by assets, and one acquisition by VietinBank since early March.