New bank establishment not easy

A new commercial joint stock bank must have at least 100 founders, according to a new regulation issued on June 7 by the State Bank of Vietnam (SBV), Vietnam’s central bank.

Decision 24/2007/QD-NHNN, which details regulations for the establishment of a new commercial joint stock bank, states that the new bank must also have at least three member institutions, each with capital valued at a minimum of VND500 billion. New banks must meet the legal requirement of capital, at least VND1 trillion initially, but no less than VND3 trillion by early 2009.

The decision also states that the capital of a new bank must be owned by shareholders, and not be loaned in any form. Each member institution can own a maximum stake of 20% of the bank’s charter capital, and an individual shareholder can hold a maximum 10%.

To ensure the stability and development of new banks in this transition stage, the central bank will allow new bank founders to make transfers to each other five years after the launch of their banks; and other shareholders to transfer their stakes in a bank three years after its founding.

Foreigners cannot serve as a party to the founding of a bank. However, they can purchase the bank’s stake after it begins operations. Apart from the capital requirements, the new decision establishes detailed criteria for human resources, information technology, and business strategy.

Kieu Huu Dung, head of the banking department within the central bank, said that authorities would receive petitions for the establishment of a new bank and consider relevant stakeholders after the new decision came into force. About 24 proposals to create new banks have been sent to the central bank, among them are proposals by big corporations like PetroVietnam, Bao Viet and FPT. The bank will apply the standards of the recent decision, and take six months to examine each file.

Reuters makes Vietnam’s stock prices known worldwide

Reuters, one of the world’s leading news agencies, has launched a new service allowing its customers worldwide to follow prices of HCM City bourse-listed stocks online.

The British news agency earlier brought prices of shares traded on the Hanoi Securities Trading Center online as well, making it easier for overseas investors to instantly track stock price movements in Vietnam.

Edward Haddad, managing director of Reuters for ASEAN, said the new service was added to the Vietnam market information section provided through the Reuters 3000 Xtra product. Customers of Reuters can now watch price movements instantly, and place orders with securities companies in Vietnam through a secure, high-speed order-making system.

Reuters and Thailand’s firm Bisnews AFE have also launched an information service called Bisnews Equities Terminal focusing on Vietnam’s stock market. This product provides updates about local stock indexes, indexes of stock exchanges in the world, forward markets, foreign exchange rates, reports on stock and foreign exchange markets, and Vietnam’s stock market. The service will help securities firms receive orders from foreign countries through Reuters’ secure order-making system.

Big deals expected during U.S. visit

Many big business deals are expected to be signed during President Nguyen Minh Triet’s visit to the U.S. this week, the first by a Vietnamese head of state.

According to Vietnam Chamber of Commerce and Industry (VCCI), Triet is accompanied by a powerful business mission comprising more than 100 top Vietnamese businesses. The big deals may involve Vietnam Airlines and Boeing; Electricity of Vietnam, Chevron and Citibank; Saigon Securities Incorporation and Credit Suisse; and some ministries, IT companies and Microsoft. The biggest deal worth more than US$1.5 billion involves Agribank and Wachovia Bank, Standard Chartered Bank and RZB Bank.

Triet is scheduled to meet the CEOs of more than 100 top U.S. companies in New York, visit the New York Stock Exchange and attend a forum on financial investment in Vietnam organized by AIG and VCCI. He will also witness the signing of contracts between Vietnamese and American businesses and the Trade and Investment Framework Agreement.