Under the plan to restructure the banking system in 2011-2015 approved by the Prime Minister, the State Bank will refinance the credit institutions with the liquidity problem. The maximum refinancing level would be equal to the chartered capital of the credit institutions. Meanwhile, weak banks will be put under the special supervision from the central bank in terms of corporate governance, management, finance and operation.
After applying the measures to ensure the solvency, weak banks can merge into other banks in a spontaneous basis. If not, the State Bank would force the banks to merge into other banks and designate the credit institutions to receive the weak banks.
There are nine weak banks which need to be restructured as stated by Governor of the State Bank Nguyen Van Binh on March 6.
Meanwhile, some big banks have stated that they are ready to receive small banks as per the request by the State Bank, or cooperate with other banks for better development.
Dang Van Thanh, Chair of Sacombank, also said on Dau tu that the bank is ready for cooperation with other banks if it is requested by the State Bank. Ten years ago, Sacombak once successfully got Thanh Thang Bank.
At the annual shareholders’ meeting of Dong A Bank held on March 30, the board of directors submitted the plan to cooperate with some other banks. Prior to that, General Director of Dong A Bank Tran Phuong Binh said to the press that the bank is looking for reasonable partners to cooperate.
Binh said that merging into others to become stronger is the good way for many banks, especially weak banks, adding that some legal entities have expressed their will to merge into Dong A.
To date, Vietnam has witnessed a successful case of merger, in which SCB, Vietnam Tin Nghia Bank and Ficombank merged into each other to become a strong legal entity. Two months after the merger, the total assets of SCB – the new bank – had reached 150 trillion dong by the end of February. The bank said it would continue the restructuring process, focus on risk management to obtain a sustainable development.
The wave of mergers and acquisitions of banks is expected to become stronger in the time to come. The rumor about the merger of Eximbank and Sacombank has become the hot topic of discussions among bankers. Meanwhile, Thoi bao Kinh te Vietnam has quoted a source from the State Bank as saying that the central bank has agreed in principle to the merger of Habubank into the Saigon-Hanoi Bank (SHB). Prior to that, the leaders of the two banks denied the information that SHB would purchase Habubank.
The newspaper has reported that on March 7, 2012, SHB and Habubank signed a memorandum of understanding which says that the two sides agree to merge in accordance with the Circular No. 04 released by the Governor of the State Bank of Vietnam.
The memorandum of understanding also showed that the two sides have agreed to choose Ernst & Young as the auditor and Vietcombank Securities Company to work as the consultant for the merger affair.
Dr Pham Do Chi, in an article on the Vietnam Economic Forum (VBF) of VietNamNet, praised the success of the State Bank in dealing with a mini bank crisis, saying that the mini crisis has been localized and settled in a peaceful way.
The most impressive success of the central bank so far is the successful merging of the three weak banks in the south. The central bank quickly ordered the merging right after discovering the attempt to run away by clients.
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