Will Vietcombank take over Saigon Bank?
Will Vietcombank take over Saigon Bank?
Vietcombank, one of five Vietnamese largest commercial banks has announced it will acquire another credit institution. Sources say the “other credit institution” could be Saigon Bank.
The information was released at an extraordinary shareholders’ meeting on December 26.
Under current laws, the involved parties in the deal must not expose detailed information to the public until they complete necessary procedures for the merger.
Therefore, Vietcombank’s chair Nghiem Xuan Thanh has declined to give more details about the deal. However, Thanh said the merger is not an obligatory deal made per the request by the State Bank under the plan on restructuring weak banks, affirming that this is a deal made on a “voluntary basis”.
Vietcombank is looking for a “good commercial bank with good infrastructure and large network”.
Some analysts said the bank to merge with Vietcombank could be Vietnam Construction Bank (VNCB), recalling Vietcombank’s statement in August, after a series of VNCB’s managers were arrested, that Vietcombank would support VNCB.
However, Thoi bao Kinh te Sai Gon quoted reliable sources as reporting that Vietcombank is targeting a small joint stock bank in HCM City, not VNCB.
An official from the watchdog agency has also said Vietcombank intends to acquire Saigon Bank.
However, he said the State Bank has just agreed in principle to the merger, while the deal will only kick off after the two involved banks submit the merger plan to the watchdog agency.
The official went on to say that the two parties are still negotiating the transfer price.
Saigon Bank is not the name analysts think of when considering the “possible candidates” for Vietcombank. It is because Saigon Bank is not a weak bank, and therefore, analysts think it does not want to be taken over by another bank.
Saigon Bank, with chartered capital of VND3.080 trillion, is one of the banks with the lowest capital in the banking system. However, it is not among the banks repeatedly incurring losses in the last few years, though its profits are modest.
A report showed that by September 30, the bank’s pretax profit had been VND203 billion, a sharp decrease of 47.8 percent in comparison with the same period last year. The post-tax profit was also modest, at VND163 billion.
In related news, Thoi bao Kinh te Vietnam has reported that another bank in the “big five”, the Bank for Investment and Development of Vietnam (BIDV), in which the state holds the controlling stake, is also considering taking over a small bank in the south.
