Valley International Journal Digital Library

VIJ Digital library
Articles

Cross-ownership in the banking system in Vietnam

PDF
  • Minh Trang Nguyen,
  • Minh Anh Trinh
Minh Trang Nguyen
Diplomatic Academy of Vietnam
Minh Anh Trinh
BIS HCMC
Published in : International Journal of Scientific Research and Management (IJSRM) , Vol. 12 No. 02 (2024)

Published 2024-02-17

Keywords

  • banking system,
  • Vietnamese,
  • Cross-ownership

Copyright (c) 2024 Minh Trang Nguyen, Minh Anh Trinh

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The banking industry is an important component of the economy, contributing significantly to economic development and national growth. A sustainable and effective banking system will bring many benefits to the economy, minimizing disadvantages to society and the environment. The banking sector in Vietnam is currently undergoing comprehensive restructuring efforts aimed at enhancing operational efficiency and ensuring safety and sustainable development within the context of economic integration. While cross-ownership is deemed normal in economies reliant on credit, the situation in Vietnam is complicated by underdeveloped inspection and supervision activities. This raises concerns about the potential negative impacts of cross-ownership on the overall efficiency of the economy, with particular emphasis on its ramifications for the banking and financial sector. In this paper, we aim to explore the complex world of cross-ownership, taking a closer look at how it's influencing the global business scene and, more importantly, shaping the banking sector in Vietnam. Our focus is on unraveling the various aspects of cross-ownership, understanding its prevalence worldwide, and delving into the implications it holds

PDF

References

  1. Berger, A. N., Hasan, I., & Zhou, M. (2009). Bank ownership and efficiency in China: What will happen in the world’s largest nation?. Journal of Banking & Finance, 33(1), 113-130.
  2. Boateng, A., Huang, W., & Kufuor, N. K. (2015). Commercial bank ownership and performance in China. Applied Economics, 47(49), 5320-5336.
  3. Chun, S. E., Nagano, M., & Lee, M. H. (2011). Ownership Structure and Risk‐taking Behavior: Evidence from Banks in Korea and Japan. Asian Economic Journal, 25(2), 151-175.
  4. Chunxia Jiang, Shujie Yao, Genfu Feng, Bank ownership, privatization, and performance: Evidence from a transition country, Journal of Banking & Finance, Volume 37, Issue 9, Circular No. 13/2010/TT-NHNN dated May 20, 2010
  5. Circular No. 15/2009/TT-NHNN dated August 10, 2009
  6. Circular No. 21/2010/TT-NHNN dated October 8, 2010
  7. Decree 56/2009/ND-CP.
  8. Diep. B. (2012, Nov 21). Officials blames cross ownership for banking risk. DTI News. https://dtinews.dantri.com.vn/en/news/018001/26191/official-blames-cross-ownership-for-banking-risks.html
  9. Don. N.D (2010), Commercial Bank Management. Phuong Dong Publishing House, Ho Chi Minh City.
  10. Duong, T. T. (2016). Restructuring the banking system: The case of Vietnam. Review of Business and Economics Studies, (4), 32-54.
  11. Duong, T. T. (2016). Restructuring the banking system: The case of Vietnam. Review of Business and Economics Studies, (4), 32-54.
  12. Financial reports, Annual reports, Prospectuses, explanatory letters of commercial banks (2010-2012).
  13. Fund Fact sheet. (2023, Oct 31). Dragon Capital. https://cdn.veil-dragoncapital.com/media/2023/11/15061623/VEIL_Factsheet_202310.pdf
  14. Ho, T., Nguyen, T. H., Nguyen, T. T. N., & Tran, T. N. (2022). Rising Risks from Cross-ownership between Real Estate Developers and Banks in Vietnam.
  15. Hoang. H.T (2011), Commercial bank management. Labor and Social Publishing House, Hanoi.
  16. BIDV Ownership structure. https://bidv.com.vn/en/quan-he-nha-dau-tu/co-phieu-bid/co-cau-so-huu
  17. Huong.L. (2019, May 27). Need a true picture of bank cross-ownership. Ministry of Finance. https://mof.gov.vn/webcenter/portal/ttpltc/pages_r/l/chi-tiet-tin-ttpltc?dDocName=MOFUCM153448
  18. Huyen.T.T, (2012). From cross-ownership at Chaebol to the reality of Vietnamese commercial banks. Finance magazine. https://tapchitaichinh.vn/so-huu-cheo-tu-cac-chaebol-han-quoc-den-he-thong-ngan-hang-viet-nam.html.
  19. Jiang, C., Yao, S., & Feng, G. (2013). Bank ownership, privatization, and performance: Evidence from a transition country. Journal of banking & finance, 37(9), 3364-3372.
  20. Jun, I., Sheldon, P., & Rhee, J. (2010). Business groups and regulatory institutions: Korea's chaebols, cross-company shareholding and the East Asian crisis. Asian Business & Management, 9, 499-523.
  21. Laeven L. (2004), The Corporate Governance of Banks: A Concise Discussion of Concepts and Evidence. World Bank Policy Research Working Paper, No. 3404
  22. Lai. N.D. (2008). Vietnam banking in the period 1986-1990: strict history that needs to be reviewed and reflected. State Bank of Vietnam Magazine. https://sbv.gov.vn/webcenter/portal/m/menu/trangchu/ddnhnn/nctd/nctd_chitiet?leftWidth=0%25&showFooter=false&showHeader=false&dDocName=CNTHWEBAP01162524875&rightWidth=0%25&centerWidth=100%25&_afrLoop=43226640888018466
  23. Lam Tien. (2023 Oct 24). Dragon Capital increases stake in Sacombank. Vietnam Investment Review.https://vir.com.vn/dragon-capital-increases-stake-in-sacombank-106285.html#:~:text=Post%20these%20transactions%2C%20the%20foreign,bank%20as%20of%20October%2023.
  24. Lan. T.T. (2013, Aug 3). The maze of bank cross-ownership in Vietnam. VnExpress. https://vnexpress.net/me-cung-so-huu-cheo-ngan-hang-o-viet-nam-2859308.html
  25. Law on Credit Institutions, Law No. 47/2010/QH12 dated June 16, 2010.
  26. Le, l. H., pham, t. H., & Le.T. N. (2020). Ownership structure and bank risk-taking: the case of vietnam. International Journal of Management, 11(03).
  27. Le, P. T., Harvie, C., Arjomandi, A., & Borthwick, J. (2019). Financial liberalisation, bank ownership type and performance in a transition economy: The case of Vietnam. Pacific-Basin Finance Journal, 57, 101182.
  28. Lim, G., & Nguyen, T. T. (2019). Banking reform in Vietnam: persistence of the state?. Geofinance between Political and Financial Geographies: A Focus on the Semi-Periphery of the Global Financial System, 155-174.
  29. Lin, X., & Zhang, Y. (2009). Bank ownership reform and bank performance in China. Journal of Banking & Finance, 33(1), 20-29.
  30. Long. N.D. (2021). Looking back on 35 years of monetary policy innovation and operations of the Vietnamese banking system. Digital Banking Magazine Special Topic 2021. https://tapchinganhang.gov.vn/nhin-lai-35-nam-doi-moi-chinh-sach-tien-te-va-hoat-dong-cua-he -thong-ngan-hang-viet-nam.htm
  31. Macroeconomic Report (2012). Economic Committee of the National Assembly.
  32. Mai, U. T. N. (2019). Master thesis: “Cross-ownership in the banking sector of Vietnam”. Tilburg University.
  33. Manh Ha. (2023, Mar 7). Betting on banks and real estate, Dragon Capital experiences ups and downs. Vietnamnet. https://vietnamnet.vn/en/betting-on-banks-and-real-estate-dragon-capital-experiences-ups-and-downs-2116347.html
  34. Nam. N.V, Quyen. X.H (2002), Financial risks - practice and assessment methods. Finance Publishing House, Hanoi.
  35. Nguyen, N., & Abumustafa, N. I. Restructuring an Emerging Market Banking Sector: The Case of Vietnam.
  36. Nguyen, T., Dao, T., & Cheah, J. (2023). Bank efficiency and governance: evidence from joint venture and foreign commercial banks in Vietnam. Applied Finance Letters, 12(2), 41-56.
  37. Peter S. Rose (2001), Commercial Bank Management (translation). Finance Publishing House, Hanoi.
  38. Schaede, U. (2006). The strategic logic of Japanese keiretsu, main banks and cross-shareholdings, revisited.
  39. Son, N. H., Tu, T. T. T., Cuong, D. X., Ngoc, L. A., & Khanh, P. B. (2015). Impact of ownership structure and bank performance-an empirical test in Vietnamese banks. International Journal of Financial Research, 6(4), 123.
  40. Son, N. H., Tu, T., & Yen, T. T. H. (2014). Bank Restructuring–International Perspectives and Vietnam Practices, Accounting and Finance Research, 3(2), p36-50.
  41. Tao, H.P, Tran, T.H (2003), Financial security of state-owned enterprises in the context of proactive international integration. National Political Publishing House, Hanoi.
  42. Techcombank Annual Report. (2021). https://techcombank.com/en/investors/annual-report/2021/our-shareholder-structure
  43. Temursho, U., & Stakhovych, S. (2009). Cross-shareholding in the Japanese banking sector, tacit collusion, and market power. Tacit Collusion, and Market Power (August 19, 2009).
  44. Thanh Duong. (2023). Techcombank welcomes increased foreign investment. Vietnam Investment Review. https://vir.com.vn/techcombank-welcomes-increased-foreign-investment-106876.html
  45. Thanh. D. (2013, Aug 30). Does the family of the chairman of Nam A Bank exceed the allowed ownership ratio?. VietStock. https://vietstock.vn/2013/08/gia-dinh-chu-tich-namabank-co-vuot-ty-le-so-huu-cho-phep-737-310310.htm
  46. Thao. L.P (2010), Master's thesis "Liquidity risk management at Vietnam Import-Export Joint Stock Commercial Bank". University of Economics, Ho Chi Minh City.
  47. Tien. N.V (2011), Commercial Bank Management. Statistics Publishing House, Ho Chi Minh City.
  48. Tran, B. T., Ong, B., & Weldon, S. (2015). Vietnam banking industry report. Duxton Asset Management.
  49. Tuanh, V. T., Giang, T. T. Q., Khai, D. C., Mau, N. D., Thanh, N. X., & Tuan, D. T. A. (2013). Cross ownership of financial institutions and corporations in Vietnam—An assessment and recommendations. Fulbright Economics Teaching Program.
  50. VNA (2023, Feb 8). Appropriate foreign ownership limit at banks expected to attract investment. Vietnam Plus. https://en.vietnamplus.vn/appropriate-foreign-ownership-limit-at-banks-expected-to-attract-investment/247998.vnp
  51. Vo, X. V. (2016). Finance in Vietnam-an overview. Afro-Asian Journal of Finance and Accounting, 6(3), 202-209.
  52. Vu, D.A (2001), Financial security for the operations of credit institutions. Finance Publishing House, Hanoi.