'Without lending, SCB will collapse,' according to the new information provided to Reuters. 'If the lending continues, the national treasury will gradually dry up.'
Vietnamese property tycoon Truong My Lan, center, looks on at a court in Ho Chi Minh City on April 11, 2024.Vietnam has mounted an "unprecedented" rescue of Saigon Joint Stock Commercial Bank, a lender engulfed in the nation's biggest financial fraud, according to three bank documents and new official information provided to Reuters by a person with access to the documents.
Vietnam's public debt was stable last year at 37% of gross domestic product, while the budget deficit widened slightly to 4.4% of GDP. Foreign reserves were around $100 billion at the end of the year, according to the central bank. That is up from about $90 billion at the end of October, according to the independent regional watchdog ASEAN+3 Macroeconomic and Research Office.
The central bank did not reply to requests for comment about the rescue effort. The finance ministry referred a question to the central bank. SCB initially told Reuters it would circulate the news agency's request for comment, but did not respond to subsequent emails. An SCB official declined to comment when contacted by phone.The State Bank of Vietnam's previously unreported cash injections into SCB amount to 5.
Lan, the tycoon whose October 2022 arrest sparked the bank run, was sentenced to death on Thursday after being found guilty of masterminding the fraud. She had pleaded not guilty to embezzlement and bribery for allegedly siphoning off $12.5 billion in loans from SCB to shell companies while effectively controlling SCB through proxies.
The central bank had provided SCB, previously one of the country's largest commercial lenders by deposits, with 592.7 trillion dong in "special loans" as of April 2, according to a recent update produced by the bank on the matter, seen by Reuters. The central bank and the government have repeatedly sought help for SCB from the private sector, specifically calling on foreign investors, state media say, despite restrictions such as a 30% cap on combined foreign ownership of Vietnamese banks.
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