Nguyen Van Binh, Governor of Central Bank of Vietnam, announced on December 6 the merger of three Ho Chi Minh City based commercial banks for the first time in Vietnam’s banking history.
The Central Bank of Vietnam also assigned the Bank for Investment and Development of Vietnam (BIDV) to fully support post-merger operations of Ficombank, Tin Nghia Bank and Saigon Bank, the three banks set to merge.
The Central Bank will begin implementation of its plan on restructuring the banking system.
The three banks have faced a liquidity crunch for sometime now.
Mr. Binh said that in the past, the three banks have faced a liquidity crunch because they used short-term capital to finance long-term capital. This affected payment abilities in all the three banks.
When capital from depositors’ savings froze, the three banks were temporarily unable to pay customers, Binh said.
The Central Bank has provided liquidity aid to the three banks, to partially stabilize the situation, he said.
The three banks voluntarily proposed the merger so as to build a stronger bank with greater access to the market and establish a broader banking system.
The cost for merging the banks has yet to be calculated, as we are still awaiting evaluation, Binh said.
This is the first merger to take place after the Central Bank announced a restructuring of the banking system in October.
The Central Bank will finish evaluating and restructuring the banks and have a suitable alternative in place by the first quarter of next year, Binh added.