Vietnam’s Central Bank and SCB Restructuring Plan

HANOI (Reuters) – Vietnam’s central bank is finalizing a report based on a proposal from an unspecified investor to restructure the ailing Saigon Joint Stock Commercial Bank (SCB), which is at the heart of the country’s largest financial fraud to date, local media reported.

Last month, it was reported that Vietnam developer Sun Group proposed a rescue plan for SCB, aimed at fully reimbursing nearly $26 billion that the central bank injected into SCB since October 2022 due to a run on its deposits.

The central bank has drafted a report regarding the rescue plan prepared by the unnamed investor, as reported by the finance ministry’s Dau Tu newspaper over the weekend.

The draft will undergo revisions after consultation with relevant state bodies, although the report did not provide details on the plan or its expected timeline.

Additionally, Reuters has noted that Sun Group was appointed by the central bank to devise the restructuring plan for SCB.

Neither the central bank, SCB, nor Sun Group responded to comments immediately.

The State Bank of Vietnam has placed SCB under its supervision to mitigate a run sparked by the October 2022 arrest of real estate tycoon Truong My Lan, who was sentenced to death for her involvement in siphoning off billions in loans from SCB into shell companies under her control.

In a separate trial concerning money laundering and illegal corporate bond issuance, Lan had her initial life sentence reduced to 30 years on appeal, according to state media.

SCB has relied on cash injections from the central bank to manage cash withdrawals since October 2022, as previously reported by Reuters.

Despite ongoing challenges, the central bank and government have persistently sought assistance for SCB from private entities, particularly urging foreign investors, according to state media; however, they face limitations, including a 30% cap on combined foreign ownership of Vietnamese banks.