Vietnam mounts $33b rescue of SCB in wake of massive fraud

Without unprecedented’ move, Saigon Commercial Bank may collapse, says source

Vietnam has mounted an "unprecedented" rescue of Saigon Joint Stock Commercial Bank (SCB), 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.

"Without lending, SCB will collapse," according to the new information provided to Reuters. "If the lending continues, the national treasury will gradually dry up." Reuters is not identifying the source more specifically due to the sensitivity of the matter.

The central bank placed SCB under its supervision to stem a run on the bank sparked by the October 2022 arrest of real estate tycoon Truong My Lan, who was sentenced to death last week for masterminding the fraud.

The new information described the situation as "unprecedented" for the massive volume of the cash injections, the complexity of the operation, and the scale of existing and potential damage to Vietnam's financial system.

Reuters was unable to establish whether the conclusions about the impact on state coffers were broadly shared by other officials currently involved with monitoring SCB.

As of the start of April, Vietnam's central bank had pumped US$24 billion (S$32.8 billion) in "special loans" into SCB, according to one of the bank documents seen by Reuters.