We then link this to the risks posed by local real estate developers’ investment in banks, and discuss possible consequences. The fast growth of commercial banks in the 2000s was associated with the emergence of complicated ownership structures within these banks. At the end of 2011, four state-owned commercial banks, namely Vietcombank, BIDV, VietinBank and Agribank, were holding shares in eight private-owned joint-stock commercial banks. Essentially, real estate developers who can somehow control banks can channel more credits to their real estate projects by lending to these developers’ affiliates. The above-mentioned cases of cross-holdings between banks and real estate developers may only be the tip of the iceberg.

Source: New York Times February 17, 2022 07:59 UTC