Banking sector to see two M&A deals

The State Bank of Vietnam (SBV) has approved a policy to merge Southern Bank into Sacombank and Mekong Bank into Maritime Bank, said Governor Nguyen Van Binh at Q&A session of the National Assembly’s Standing Committee.

Tycoon Tram Be and his family are holding a large ratio in both Sacombank and Southern Bank, exceeding ownership ceiling levels in the 2010 Law on Credit Institutions.

The two banks’ merger as a result will be a chance to deal with the beyond ceiling ownership ratios and cross-ownership also.

However, Sacombank will have to bear Southern Bank’s bad debts that were about 4 percent by the end of 2013.

It is not clear whether Singaporean United Overseas Bank Limited (UOB), a strategic shareholder of Southern Bank, will withdraw capital from the bank after the merger.

In the second case, Maritime Bank is holding 10.16 percent shares of Mekong Bank and the two banks’ shareholders have soon agreed with the merger plan.

The new bank will have chartered capital of VND11,8 trillion including VND8 trillion of Maritime Bank and total asset worth VND113 trillion.

Bad debts in Mekong Bank have been controlled below 3 percent in recent years.

Singaporean Fullerton Financial Holdings-FFH holding 20 percent of the Mekong Bank’s shares has completed capital withdrawal, according  to a news source from the State Bank.

The State Bank has permitted FFH to transfer its shares to Maritime Bank.

FFH leader said they would find another Vietnamese partner to boost its development strategy.

According to reports by the State Bank to the NA Standing Committee, nine weak commercial banks have been determined since 2012. SBV has approved eight restructuring projects and will soon submit the Prime Minister another for the rest bank.

By Bao Lam – Translated by Hai Mien

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