Vietnam to raise ceiling on foreign holdings in banks

Hanoi

VIETNAM is changing rules to allow foreign investors bigger stakes in local banks in its latest move to rebuild a financial sector battered by bad debt, according to Prime Minister Nguyen Tan Dung.

The government will soon issue a decree to permit foreigners to buy stakes "above the current 30 per cent ceiling", Mr Dung was quoted as saying late on Monday. The 30 per cent cap covers total foreign shareholdings and limits a single foreign strategic investor to a one-fifth stake. That has proved unattractive for many foreign lenders which see little incentive in a minority share and limited control of banks requiring restructuring and recapitalisation.