The foreign ownership limit at stronger Vietnamese banks that acquire weaker lenders may increase to 49 per cent under a draft government decree.

The State Bank of Vietnam (SBV) is compiling a draft decree amending and supplementing a 2014 government Decree on the “Purchase of Vietnamese bank shares by foreign credit institutions”.

Under existing regulations, the current cap on foreign ownership is 30 per cent.

The government has directed Vietnam’s stronger financial institutions to take over weaker ones, and DongABank, CB, OceanBank, and GPBank have been classified as “weak” lenders in need of restructuring.

Four credit institutions - Vietcombank, MB, HDBank and VPBank - have revealed plans to acquire weaker banks.

As of September 30, Vietnam had nine foreign banks, four State-owned banks, and 31 joint stock banks.