The State Bank of Vietnam (SBV) put Dong A Joint Stock Commercial Bank (Dong A Bank) under special control on August 14 to manage any possible risk and prevent the loss of the bank’s assets.
The decision was made after "a recent investigation of the SBV found several violations in financial management, lending activities and other business activities at the bank during the year 2012 and before, which seriously affected its financial situation and operation," the SBV said in a statement.
SBV said it will dismiss and punish some of the bank's leaders for wrongdoings. The central bank will assign staff from the Bank for Investment and Development of Vietnam to take over governance and administration of the bank to ensure continued stable operations.
The SBV said the rights and legitimate interests of depositors will be guaranteed.
Established in 1992 with charter capital of VND20bn (USD950,000 ), Dong A Bank grew to VND5trn (USD226.24 million) and total assets of nearly VND90trn.
Dong A was not on the list of nine banks set for restructuring by the SBV -- SCB, Ficombank, TinNghiaBank, Habubank, Tienphongbank, GP Bank, Navibank, TrustBank and Western Bank -- but it was in the spotlight when in 2014 it posted a pretax profit of VND35bn, down 96 percent on 2013.
Dong A's CEO, Tran Phuong Binh, told reporters the bank was restructuring and a letter had been sent to Prime Minister Nguyen Tan Dung seeking a deadline extension until the end of the year.
"I think we have two measures: trying to solve bad debts or selling shares to foreign investors and I think the second would work best," Binh said.