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The State Bank of Vietnam (SBV) took over Global Petrol Bank on July 7, after the bank failed to meet a deadline to have secured legal capital requirements.

As part of the take over, the SBV acquired all of the equity of the joint stock bank at a price of zero dong per share, converting it into a one-member limited company with a charter capital of more than 3 trillion VND.

The Global Petrol Bank, or GP Bank, has been listed among the nation's weaker lenders that need to be managed for three years, after a national plan was put in place to restructure the nation's banking system.

The bank has now been placed under special government supervision, following its inability to assure a minimum bank equity of 3 trillion VND (138.24 million USD), as stipulated by the law.

GP Bank held its third irregular shareholders meeting this year on July 2, in an effort to seek approval from shareholders for a charter capital supplement by July 4, following the order by the SBV.

The majority of shareholders, however, rejected the capital increase proposal of the bank's management board.

Further, SBV officials said the takeover would enable the central bank to become more active in restructuring GP Bank, as well as assuring the security and stability of the nation's banking sector.

The acquisition terminated all statuses, including the rights and interests of existing shareholders in GP Bank. But all legal rights and interests of existing depositors at the bank will be guaranteed, officials confirmed.

Major lender Vietnam Bank for Industry and Trade, or VietinBank, is to take part in the management of GP Bank.

Additionally, the former head of Vietinbank's supervisory board, Tran Thi Le Nga, was appointed chairwoman of GP Bank's management board.

On July 2, audited financial reports revealed that GP Bank suffered a cumulative loss of 12.28 trillion VND (584.76 million USD) and its ownership capital was some minus 9.20 trillion VND (438.10 million USD), as of early April.

Further, the bank's bad debt ratio was at a record high of 45.37 percent, while its outstanding loans totalled only 6.67 trillion VND (317.62 million USD).

This year, the SBV also acquired Vietnam Construction Bank and Ocean Bank due to violations of having a lack of required capital.

Source: VNA