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Vietnam’s Massive Saigon Bank Bailout Rises to $24.5 Billion

The country’s central bank has provided a huge sum to protect Saigon Joint Stock Commercial Bank after it was rocked by a record financial fraud

An SCB banner is seen in front of a building under construction in Ho Chi Minh City, as Saigon is now called (Reuters).


Vietnam’s massive bailout of the Saigon Joint Stock Commercial Bank (SCB) has escalated to $24.5 billion – thanks to special loans equivalent to 6% of Vietnam’s 2023 gross domestic product.

Over the past two months the country’s central bank has provided a further $1.2 billion to the distressed SCB, according to a bank document seen by Reuters, in a bid to protect  depositors’ funds.

In April the central bank was reported to have mounted an “unprecedented” rescue of SCB, a lender engulfed in the nation’s biggest financial fraud, which a source at that time said would collapse without the funding.


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As of May 29, the central bank had lent SCB 622.7 trillion dong ($24.5 billion), according to the document prepared by SCB that detailed daily injections into the bank to keep track of the funds and their use, up from 592.7 trillion dong ($23.3 billion) as of April 2.

SCB used the central bank funds to help it settle withdrawals and payments of 626.9 trillion dong since October 2022 when the lender was put under central bank supervision, the document showed. At that time, it had deposits of 669 trillion dong.

The State Bank of Vietnam and SCB, previously one of the country’s largest commercial lenders by deposits, did not reply to requests for comment. In April the State Bank confirmed it was providing financial support to SCB.

Vietnamese developer Truong My Lan, the chairwoman of real estate developer Van Thinh Phat Holdings Group, seen during her trial for the country’s biggest ever financial fraud, in Ho Chi Minh City
Developer Truong My Lan is seen during her trial in Ho Chi Minh City. Photo: State media / VietNamNet.

The run on SCB was triggered by the October 2022 arrest of real estate tycoon Truong My Lan, who in April was sentenced to death after being found guilty of masterminding a huge fraud at the bank.

Judges concluded that she siphoned off $12.5 billion in loans from SCB to shell companies while effectively controlling the bank through proxies. She pleaded not guilty and has appealed the ruling.

Under Vietnam’s official deposit guarantee scheme, only about $5,000 is covered per depositor per bank, but as of early April, the central bank’s cash injections into SCB amounted to about a quarter of Vietnam’s foreign exchange reserves.

The central bank has not said how it has funded its large-scale lending to SCB, but money supply rose by about $82 billion between September 2022, the month before SCB’s bailout began, and February 2024, the latest public data showed.

That is a 15% increase, compared to GDP growth of nearly 6% in roughly the same period, according to an analysis of data from the central bank and Vietnam’s statistics office.

The Southeast Asian country’s foreign reserves, meanwhile, have remained largely stable, although the central bank has sold dollars in recent weeks to prop up its currency.


Turmoil in real estate sector

SCB’s woes occurred as Vietnam’s banking sector was facing heightened risks from prolonged turmoil in the country’s real estate industry, triggering concerns about broader risks to the financial system.

In April, the State Bank of Vietnam said it was continuing to support SCB under a roadmap for its restructuring – a move that ratings agency Fitch said last month was a positive sign of the central bank’s commitment to help significant lenders.

While the SCB’s woes showed shortcomings in Vietnam’s financial supervision, Fitch added, the unprecedented rescue efforts had not created new contagion risks in the country’s banking system.

But the increase in money supply came at a time when the Vietnamese dong weakened and contributed to a pick-up in inflation, which in May exceeded 4.4%, the highest since January 2023.


  • Reuters with additional editing by Jim Pollard



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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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