Vietnam developer plans 15-year rescue for bank at heart of giant fraud

The bank at the centre of Vietnam's biggest financial fraud has received a central bank bailout amounting to 5 per cent of the nation's 2024 economic output, which a local white knight hopes to repay in 15 years, documents seen by Reuters show.

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The nearly US$26 billion (S$34.61 billion) pumped into Saigon Joint Stock Commercial Bank (SCB) since a 2022 run on the bank, triggered by the arrest of the real estate tycoon who effectively controlled SCB, highlights Vietnam's struggles to oversee its banks and contain potential sectoral risk.

Vietnam is scrambling domestically while its export-driven economy faces the risks of a global trade war as US President Donald Trump imposes tariffs on America's trading partners.

SCB remains "completely dependent on special loans" from the State Bank of Vietnam to cover deposit withdrawals, and the central bank's lending would reach 657 trillion dong (S$34.25 billion) in the first year of restructuring, according to the rescue road map prepared by Sun Group, the developer mandated by the central bank in November 2023 to help SCB.