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Several bank mergers to take place

VietNamNet Bridge – Many banks have brought forward merger plans at their annual shareholders’ meetings, including several obvious deals to be carried out soon.

The merger between Dai A Bank and HDBank has been approved by the central bank, said HDBank Chairwoman Le Thi Bang Tam at the recent shareholders’ meeting, where the proposal for this merger was passed.

Similarly, the merger plans by Maritime Bank, Sacombank and Eximbank were submitted to their shareholders and all got the nod.

Through the signing of a strategic partnership last year, Eximbank and Sacombank are heading towards a merger.

Le Hung Dung, board chairman of Eximbank, said much about the scale and the network of Sacombank when delivering the merger proposal at the meeting of shareholders. Pham Huu Phu, Eximbank stakeholder, is currently board chairman of Sacombank.

With fairly stringent regulations on network expansion set by the central bank, merger is the shortest path to breakthrough development, said Dung.

In addition to the banks with specific partners, many other banks submitted merger plans to their shareholders in advance, in preparation for possible opportunities.

For example, Military Bank (MB) sought the nod from its shareholders on a merger although the bank had not chosen any partner yet. MB’s high requirements for bad debt ratio and financial safety make all the banks interested in merging with it so far unqualified.

Likewise, the proposal for merger that ABBank delivered at its shareholders’ meetings was passed though it was still unknown who would be the bank’s partner in such a deal.

Meanwhile, the merger plan of DongA Bank was already approved at the shareholders’ meetings last year.

Pham Van Bu, board chairman of the bank, said his bank must spur capital to VND6 trillion to increase its scale, and then would choose an appropriate time for the merger, because DongA Bank stock price is currently quite low.

“Although 3-4 partners have come to discuss this issue, we are still considering,” he said.

Apart from merger, a number of banks intend to put up their stakes for sale to overcome the current tough times.

At the shareholders’ meetings last week, Navibank mentioned the participation of new shareholders in its restructuring. A senior source from the central bank revealed the restructuring plan for Navibank had been approved.

Earlier, Westernbank submitted its plan for merger with PetroVietnam Financial JSC (PVFC) to its shareholders and received their nod. Meanwhile, TRUSTBank has sold a majority stake to Thien Thanh Group.

Nguyen Hoang Minh, deputy director of the central bank’s branch in HCMC, deemed mergers and acquisitions among banks very appropriate in the current context. Joining hands will help banks improve their financial strength to deal with poor credit growth and rising bad debt at present.

However, an expert said the central bank should closely control bulk purchasing of bank shares to prevent cross-ownership and money laundering, and protect bank shareholders and depositors.

Source: SGT

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