Three Vietnamese banks facing a liquidity crunch have decided to merge to form a larger bank, said State Bank of Vietnam (SBV) Governor Nguyen Van Binh.
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| Ficombank, SCB and TinNghiaBank to merge |
Binh said the First Joint Stock Commercial Bank (Ficombank), Saigon Commercial Bank (SCB) and Viet Nam Tin Nghia Commercial Joint Stock Bank (TinNghiaBank), weren't operating effectively, having liquidity issues and temporarily lost their ability to pay until the central bank intervened to uphold their liquidity. The banks, all based in Ho Chi Minh City, agreed to the merger as a way of continuing operations and strengthening their weak market position, Binh added.
Binh said the SBV had assigned the state-run Bank for Investment and Development of Vietnam (BIDV) to manage the new bank as the official representative of the government’s stake, but didn't disclose the size of the stake or the name of the new bank.
Representatives from BIDV and the three banks will enter specific negotiations about the merger, including the proportion of government shares represented by BIDV in the new bank and the stakes held by existing shareholders.
The SBV said it expected to finish its assessment and classification of commercial banks in Vietnam by the first quarter of 2012 as part of a major restructuring of the financial sector.
At a recent Government press conference, Minister without portfolio and Chairman of the Government Office Vu Duc Dam confirmed that the Government would acquire a number of dangerously inefficient commercial banks as part of measures to guarantee customer deposits.
International financial organisations such as the World Bank and the Bank for Asian Development (ADB) have also suggested Vietnam push forward with mergers and acquisitions process in the banking sector.