Upcoming EVFTA to fortify lenders, illustration photo The EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement are set to amplify European giants’ presence in Vietnam. After the trade deal moves into effect, Vietnam will lift some limits on foreign ownership in local banks to 49 per cent in the next five years, with the exception of the four joint-stock commercial banks in which the state still holds a controlling stake. However, after the five-year period, this relaxed foreign ownership limit of 49 per cent would be no longer applicable. The current rate is just 30 per cent. “Vietnamese policymakers should take it really seriously in this regard since finance is a sensitive sector. The new approach, though a bit cautious, is appropriate,” explained Nguyen Thi Thu Trang, director of the WTO Centre at the Vietnam Chamber of Commerce and Industry. The new move is slated to bring more consolidation in the banking sector, though it has also raised concerns of valuations and conflicts arising along the way. Some experts believe that private lenders such as Techcombank, ACB, HDBank, VIB, or VPBank, could be the most promising candidates. However, each has its own praiseworthy aspects and shortcomings. Private… Read full this story
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