Customers make transactions at a Vietcombank’s office in Hanoi. (Photo vietcombank.com.vn) One of them is related Commercial Joint Stock Bank for Foreign Trade of Vietnam(Vietcombank). Vietcombank will carry out a private placement of 6.5 percent ofits capital. If successful, the deal will help the bank gain some 30 trillionVND, tinnhanhchungkhoan.vn reported.
Vietcombank is also expected to participate in restructuring a weak bank in theform of mandatory transfer.
Another notable deal is that Military Commercial Joint Stock Bank (MB) hassubmitted to its shareholders a plan to receive a mandatory transfer ofOceanBank.
MB’s vice chairman Luu Trung Thai said the cooperation with OceanBank is botha political task and an opportunity for MB to expand its operational scale. MBwill coordinate with OceanBank to check their data system before developing aplan to submit to the Government.
OceanBank’s representatives have so far announced one of the bank’s key tasksin 2022 is to coordinate with MB in carrying out a syndicated loan programme,including retail lending, and develop a number of competitive products toattract customers and increase the bank’s brand name in the credit market.
According to analysts, in the first phase, with a large liquidity support fromthe central bank, MB may not need to immediately pour capital into OceanBank,but it will support OceanBank through sending its senior management personnelto work with them.
With the mandatory transfer of OceanBank, MB will enjoy a number of benefits,including a higher credit growth quota. Therefore, this is a win-win deal forboth MB and OceanBank.
Besides Vietcombank and MB, some other banks have been assigned by theGovernment to study plans to support weak banks including DongABank, CBBank andGPBank.
According to a PricewaterhouseCoopers (PwC)’s recent report on global M&Atrends in 2022, despite the market uncertainty, M&A activities are expectedto continue to grow strongly thanks to the abundance of capital source andhigher demand. In particular, the M&A deals in the banking industry arepredicted to boom, with the participation of foreign financial organisations.
Economist Vo Tri Thanh said despite the impact of COVID-19, the success of manyM&A deals in the banking industry proved that foreign investors highlyappreciated the growth potential of the Vietnam’s economy and the bankingindustry.
If the M&A of finance companies were the spotlight of the market in 2021,this year would see many M&A deals of bank share sales to foreign partners,Thanh predicted.
For example, BIDV has so far planned to carry out a private placement of 8.5percent of its shares in 2022. If BIDV’s offering is successful, the bank willearn about 14-15 trillion VND.
Similarly, Ocean Commercial Bank (OCB) is preparing to sell 10 per cent ofcapital to foreign partners while Saigon Hanoi Commercial Joint Stock Bank(SHB) has also temporarily locked the foreign ownership rate at 10 percent tofind a strategic partner.
Nam A Commercial Joint Stock Bank (NamABank), Saigon Commercial Joint StockBank (SCB) and Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank)have also planned to attract more foreign capital.
According to Pham Van Thinh, general director of Deloitte Vietnam, when thepandemic is under control, banking M&As will develop again. Though the baddebts of Vietnamese banks are at risk of increasing due to the pandemic’simpacts, banks are still attractive to international investors thanks to theirvery positive business results and a large market room, especially in consumercredit and retail banking segments.
Warrick Cleine, chairman and CEO of KPMG Vietnam and Cambodia, said Vietnam’sfinancial industry would continually see many M&A deals because the numberof banks in the country was still large while the Government and the State Bankof Vietnam were gradually restructuring and streamlining the size of thebanking system so as to make it grow stronger. Therefore, it would be difficultfor weak banks and those under the restructuring to avoid M&As./.
VNA
