On January 17, the State Bank of Vietnam (SBV) held a ceremony to announce the decision to compulsorily transfer Global Petroleum Commercial Joint Stock Bank (GPBank) to Vietnam Prosperity Joint Stock Commercial Bank ( VPBank ) and DongA Commercial Joint Stock Bank (DongA Bank) to Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank).

After the compulsory transfer, GPBank and DongA Bank will be one-member limited liability commercial banks with 100% charter capital owned by VPBank and HDBank.

Under the management of VPBank and HDBank as owners, all legitimate rights of depositors and customers at GPBank and DongA Bank continue to be guaranteed in accordance with the agreement and provisions of law.

VPBank and HDBank are joint stock commercial banks with sufficient capacity, experience and solid foundation to successfully implement compulsory transfer plans.

At the same time, with the mechanism applied according to the provisions of law, the mandatory transfer is also an opportunity for VPBank and HDBank to expand operations and deploy new, modern business models.

Transfer of goods.jpg
Governor of the State Bank of Vietnam Nguyen Thi Hong congratulated the banks that received and were subject to compulsory transfer. Photo: Mai Phuong.

On VPBank's side, this bank said it will contribute capital to GPBank during the implementation of the compulsory transfer plan so that GPBank can have more financial resources, develop business, and improve operating results; the total capital contribution will not exceed 20% of VPBank's charter capital.

“The capital contribution will be carefully considered by the bank and consulted with the General Meeting of Shareholders to ensure both capital safety and shareholder interests. In addition, VPBank will transfer experience and knowledge to support the restructuring process of GPBank according to the compulsory transfer plan,” VPBank said.

HDBank affirmed that DongA Bank is still an independent legal entity and does not consolidate financial reports into HDBank. DongA Bank is managed and supported by HDBank to gradually restore operations and improve its financial situation.

DongA Bank and HDBank will be supported by the State Bank of Vietnam’s policy mechanisms to ensure an effective compulsory transfer process. HDBank has experience in successfully implementing a number of restructuring and M&A projects safely and effectively, bringing stability and development to the participating parties.

HDBank will focus its resources and restructuring experience to accompany and support DongA Bank in consolidating its operations, overcoming existing problems, and aiming to build DongA Bank into a bank with healthy, safe and sustainable finances.

VPBank and HDBank are banks with a leading position in the Vietnamese banking system, with strong financial potential. The compulsory transfer of GPBank to VPBank and DongA Bank to HDBank is expected to help restore these two banks, while ensuring the legitimate rights of shareholders and employees of the two receiving banks.

Compulsory transfer is one of the options for restructuring specially controlled credit institutions stipulated in the Law on Credit Institutions.

This is one of the solutions to contribute to ensuring macroeconomic stability, national financial and monetary security, political stability and social order and safety.

This issue has been of concern to competent authorities, and has been strongly directed by the Government and the Prime Minister. The State Bank has closely coordinated with ministries, branches and relevant agencies to direct banks to develop compulsory transfer plans to be submitted to competent authorities for approval in accordance with legal regulations.