Foreign Ownership Cap Raised to 49%: Will HDBank Lead the Charge?

Economic

Summary:

Vietnam’s new Decree 69 allows certain banks to raise the foreign ownership limit from 30% to 49%. While this opens opportunities for foreign capital inflow, immediate impact is limited...

New Foreign Ownership Cap: Opportunity With Caution

As of May 19, 2025, Decree 69 allows commercial banks participating in compulsory acquisitions (excluding those with more than 50% state ownership) to raise foreign ownership caps from 30% to 49%. This policy shift benefits institutions such as HDBank, MB, and VPBank.

However, none of these banks have reached the previous 30% cap, either by regulation or internal limits. Their willingness to unlock this room depends not just on policy permission, but also on whether they need capital, the makeup of their shareholder base, and the appetite of foreign investors.

HDBank: Poised to Move First

Analysts from ACBS believe HDBank is best positioned to open up to foreign investors. Its current foreign ownership is only 17.25%, with an internal cap of 17.5%, leaving a sizable buffer under the new 49% ceiling.

With growing demand to strengthen Tier 1 capital and reduce reliance on Tier 2 bonds, HDBank may seek to raise capital by bringing in a foreign strategic investor. This move could also improve its capital adequacy ratio (CAR), allowing the bank to maximize high credit growth quotas of 20–30% per year granted through restructuring efforts.

Furthermore, the recent establishment of HD Financial Group—an integrated financial ecosystem comprising Vikki Digital Bank, HD SAISON, HD Securities, and others—makes HDBank an attractive long-term investment target.

VPBank: Strategic Partnership in Place, But No Urgency

VPBank already has a foreign strategic partner, SMBC of Japan, and currently holds a 24.87% foreign stake. While the bank could leverage the new 49% limit to deepen this partnership or bring in new investors, its CAR is solid at 14%, and it does not face short-term pressure to raise capital.

Chairman Ngo Chi Dung acknowledged that while the foreign room isn't maxed out yet, it could be filled soon. He sees the increased cap as a valuable option for future strategic moves but not an immediate priority.

MB: Prioritizing Internal Strength Over External Ownership

MB has a lower CAR of around 10% but has not issued much Tier 2 capital. Though it might need additional funds in the future, Chairman Luu Trung Thai maintains that foreign ownership is “not crucial” at this stage. MB emphasizes internal development and sees investor relations as more about transparency and governance than foreign capital injection.

A major hurdle is MB's state-owned structure, notably with Viettel as a key shareholder. Any foreign ownership increase could face dilution resistance from such entities, limiting the bank’s flexibility despite regulatory leeway.

Short-Term Hesitation, Long-Term Potential

Although Decree 69 marks a major step forward in attracting foreign investment, analysts caution that its impact may be muted in the short term. Foreign investors are still net sellers of bank stocks amid broader market volatility, limiting immediate inflows.

In the medium to long term, however, the expanded 49% cap is expected to provide meaningful funding opportunities—especially for banks that plan to restructure weak institutions, expand digital finance ecosystems, or secure strategic partnerships.

Vietnam’s move to expand foreign ownership limits in selected banks is a strong signal of reform and market openness. Yet immediate action will likely depend on individual bank needs and investor appetite. HDBank appears most likely to lead the shift, given its growing capital demands and proactive strategy, while MB and VPBank adopt a more measured approach. As market conditions improve and strategic alignments develop, the true impact of this policy may become clearer in the years ahead.

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