The draft Master Plan on Economic Restructuring in the 2016-2020 period states that efforts will be made to “Continue to equitize State commercial banks and lower the State’s holding in these banks to 65 per cent, and implement the equitization of the Vietnam Bank for Agriculture and Rural Development (Agribank).”

The draft was prepared at the government’s direction and will be discussed at the second meeting of National Assembly (NA) XIV later this year.

Agribank is one of the four biggest banks in Vietnam. While the three others have been equitized and listed on the stock market, Agribank remains 100 per cent owned by the State. It is a major lender to agriculture projects, primarily in rural areas.

It has some 2,300 branches and transaction points nationwide and a branch in Cambodia. Its customer base now includes over 10 million farming households and 30,000 enterprises. It also has nine subsidiaries in finance, jewelry, tourism, and investment.  

Total assets as at December 31, 2015 stood at VND874 trillion ($39.18 billion) and total mobilized capital VND804 trillion ($36.04 billion), an increase of 15.5 per cent compared to 2014, according to the bank’s latest report.

Total lending reached VND673.43 trillion ($30.18 billion), an increase of 16 per cent against the end of 2014. Seventy-three per cent of lending went to agriculture and rural development. Pre-tax profit was VND3.7 trillion ($165.87 million), an increase of 15 per cent compared to 2014.

Several instances of fraud committed by leaders of Agribank have been revealed recently, involving trillions of Vietnam dong.

In one case, VND2.48 trillion ($123.28 million) was lost at the bank’s South Hanoi Branch in a fraud involving the CEO and other leaders. In January this year the court sentenced Mr. Pham Thanh Tan to 22 years in jail, seized $310,000, and fined him VND22 billion ($986,260).

In mid-May Mr. Ho Dang Trung, former CEO of Agribank Branch No. 6, was sentenced to 20 years in jail in a case that saw some VND1 trillion ($44.83 million) go missing.

Financial market reform focusing on financial institutions has long been discussed by the Vietnamese Government and the NA. Achievements have been made but Vietnam must reach its targets faster.

“Reform, while still slow, should also start to pay off,” analysts from HSBC wrote in its Vietnam at a Glance report released on August 9. “With global and domestic growth moderating, Vietnam needs to push ahead with greater fervor than ever on restructuring its SOEs and banks.”

Commenting on banking reform, Mr. Chidu Narayanan, an Economist at Standard Chartered Bank, said that it is heading in the right direction but should be sped up. “I think it should be faster but it is certainly on the right theme and we think that so far it has been satisfactory.”