The State Bank of Vietnam has approved projects to restructure eight out of nine weak banks determined since 2012. It will submit the Government a scheme to reorganize the rest one and instruct commercial banks to continue Mergers and Acquisitions (M & A) operations.
|Mekong Bank will merge into Maritime Bank (Photo: SGGP)|
Two years after restructuring, the banking system has seen a reduction of five weak banks through M & A deals.
The five banks include De Nhat and Tin Nghia, which have merged into Saigon Bank to create SCB Bank; Hanoi Housing Bank and Saigon Hanoi Bank merged into SHB; Western Bank and PetroVietnam Finance Corporation joined up to form PVcombank.
Dai A Bank, HCMC Development Bank and Société Générale Viet Finance (SGVF) Company merged into HDBank.
Among the rest four weak ones, Dai Tin Bank and Nam Vietnam Bank have been renamed Vietnam Construction Bank and National Commercial Bank respectively. Tien Phong Bank is carrying out self-restructuring measures. GP Bank waits for the Prime Minister’s opinion on capital contribution from foreign credit institutions.
Governor of the State Bank Nguyen Van Binh said that most restructuring projects including M & A deals have been done on a voluntary basis without any mandatory intervention from the State Bank.
The restructured banks are now conductiong measures to streamline all fields including finance, operation &management, and repair mistakes under supervision of the State Bank.
The State Bank has agreed with restructuring 24 out of 25 normally operating banks. Of these, 18 projects have been approved.
With the policy of reducing the bank number to 20-25, other under performing banks will have to implement M & A operations. Of these, Southern Bank is about to merge into Sacombank and Mekong Bank into Maritime Bank.
Governor Binh said that all commercial banks have submited their restructuring plans for approval. Four out of five state-owned commercial banks have been equitized, except Agribank, because Agribank has showed a lot of limitations.
However, a State Bank’s project is also being conducted to restructure it. To date, Agribank Members’ Council has been changed to improve its management ability.