Banks begin merger process

Banks begin merger process

Eximbank (EIB) and Sacombank (STB) late yesterday signed a five-year co-operation agreement which will pave a way for a likely merger between two of the biggest commercial banks in Viet Nam.

Following that, the two banks will seek approvals from their shareholders and relevant State authorities for a merger in the next three to five years.

Eximbank chairman of the board of directors Le Hung Dung said if the merger was realised, the merged bank would have a total charter capital of more than VND30 trillion (US$1.428 billion).

Eximbanks is now a major shareholder of Sacombank with a 9.73 per cent stake.

According to the press release from Eximbank, increased co-operation in various fields between the two banks will help both parties overcome difficulties in the time of economic crisis, enhance their competitiveness and contribute to the sustainable development of Viet Nam's banking system.

At the present time, the two banks will collaborate with each other in providing customer loans in the form of co-financing or trust fund lending. At the same time, they will assign a capital limit to each other on the interbank market to enhance their mutual liquidity while optimising their capital sources.

In addition, the two sides will support each other in gold and foreign exchange businesses, helping manage foreign exchange states of each party in accordance with the regulations of the State Bank of Viet Nam.

Eximbank's charter capital reached almost VND12.36 trillion ($591.1 million) and its assets totaled over VND160 trillion ($7.66 billion) by the end of September last year. Meanwhile, charter capital of Sacombank is now VND10.74 trillion ($513.9 million) and its total assets were VND147 trillion ($7 billion).

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