Vietnam Economic News: 15.3 – 22.3.2025
Summary of Vietnam Economic News: 15.3 - 22.3.2025
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Summary of Vietnam Economic News: 15.3 - 22.3.2025 ---
Vietnam allows some banks to have up to 49% foreign ownership
Reuters News – 20 March 2025
Vietnam's government said some private banks can increase their foreign ownership to up to 49% from 30% after they took over struggling financial institutions as part of the government's plan to restructure the banking system. The government did not name any eligible banks in the statement posted on its website, but said the exemption did not apply to state-owned commercial banks. "Total foreign investors' ownership in a commercial bank that compulsorily received a distressed rival may exceed 30% but not exceed 49% of its charter capital," according to the decree, which is expected to take effect from May 19. In January, the central bank, the State Bank of Vietnam, directed two commercial banks to take over underperforming rivals as part of the restructuring drive that it said was necessary for political stability and social order. Vietnam Prosperity Joint Stock Commercial Bank (VPBank) took over GPBank and Ho Chi Minh City Development Bank (HDBank) took over DongA Bank. In October last year, also as part of the central bank's restructuring, Military Commercial Joint Stock Bank (MBBank) took over smaller rival Ocean Bank, while state-owned Vietcombank took over Construction Bank.
Jadestone Energy submits plan to develop offshore gas fields in Vietnam
Reuters News – 18 March 2025
Singapore-based oil and gas development company Jadestone Energy PLC has submitted a plan to state-controlled PetroVietnam to jointly develop two offshore gas fields in southwest Vietnam. The proposal includes drilling two wells in the Nam Du and U Minh fields to support a plateau gas production rate of 80 million standard cubic feet a day, Jadestone said in a statement. Development of the Nam Du and U Minh gas fields would lessen Vietnam’s future dependence on expensive liquefied natural gas imports, according to Jadestone. The gas will be tied to a floating production, storage and offloading unit (FPSO), where it would be processed and exported onshore through a 34 km (21 mile) pipeline to the nearby Ca Mau industrial complex. Jadestone has operations across Southeast Asia and Australia. This project would mark its foray into Vietnam. The company did not provide a timeline for gas production, but said it was aiming to finalise a gas sales agreement with a buyer, which it did not identify.
Vietnam developer proposes 15-year rescue for bank at heart of giant fraud
Reuters News – 18 March 2025
The bank at the centre of Vietnam's biggest financial fraud has received a central bank bailout amounting to 5% of the nation's 2024 economic output, which a local white knight hopes to repay in 15 years. The nearly $26 billion pumped into Saigon Joint Stock Commercial Bank (SCB) since a 2022 run on the bank, triggered by the arrest of the real estate tycoon who effectively controlled SCB, highlights Vietnam's struggles to oversee its banks and contain potential sectoral risk. The nation is scrambling domestically while its export-driven economy faces the risks of a global trade war as President Donald Trump imposes tariffs on U.S. trading partners. SCB remains "completely dependent on special loans" from the State Bank of Vietnam to cover deposit withdrawals, and the central bank's lending would reach 657 trillion dong ($25.8 billion) in the first year of restructuring, according to the rescue roadmap prepared by Sun Group, the developer mandated by the central bank in November 2023 to help SCB. The lender, under Sun Group ownership, would start repaying the central bank in the 14th year of the rescue plan, subject to market conditions, under the base scenario of the 222-page plan, which has not been reported previously. Under this scenario, SCB would fully repay the central bank within 15 years of the approval of the restructuring, which Sun Group hopes to obtain as early as the start of next month.
Trump's new tariffs and its impact on steel products
Reuters News – 20 March 2025
Vietnam announced last Friday that it would impose a temporary anti-dumping levy of up to 27.83% on some steel products from China, effective from March 7. Though Vietnam launched the anti-dumping investigation last July, the announcement took the market by surprise because it came earlier than expected. Vietnam was China's largest steel export destination in 2024, accounting for 11.5%, or 12.77 million metric tons, of China's total steel exports which hit a nine-year high. China's giant steel industry is facing mounting pressure on exports this year as it faces another wave of trade frictions from U.S. President Donald Trump's new tariffs. Trump announced plans earlier this month to impose 25% tariffs on all steel and aluminium imports into the United States, effective from March 12. At the same time, India has also proposed a temporary tax of 12% on imports of some steel products from China and Vietnam, as the country seeks to defend against a flood of steel imports following U.S. tariffs.