Mergers and acquisitions (M&A) in the banking sector in 2014 are not as common as in previous years when most of the M&A cases involved smaller banks merging into larger banks. This year a number of leading banks merged to create greater strength, the Vietnam Economic News reported.
Since the credit institution restructuring plan for the 2011-2015 period was kicked off almost four years ago, all M&A cases in the banking sector were implemented on a voluntary basis.
According to the State Bank of Vietnam, all the weaker banks that were restructured via M&As operated more effectively than previously. Their operational safety indexes and solvency improved. They attracted more deposits. Problems of bad debts were minimized, while violations related to stake holding rates of major shareholders and credit provision were being dealt with, and the banks’ organization and operations were strengthened.
Since early this year, there have been many M&A cases in the banking sector. Small commercial banks merged with each other or merged into larger banks. Well-known cases included M&As at Southernbank, DongAbank, Sacombank and Eximbank.
KPMG Vietnam and Cambodia Chairman John Ditty said at a recent M&A forum that finance, fast-moving consumer goods, insurance and telecommunications remained the core of M&A activities. If the economy grows strongly, M&A will become busier, the scale of M&As in the banking sector would change and provide more opportunities for investors, John Ditty was quoted as saying.
The second wave of M&As hasn’t only seen weak banks merge, larger banks have merged to create joint strength. M&As between non-banking institutions, such as finance and financial leasing companies will be promoted in the coming time. Experts have predicted that the second wave of M&As in the banking sector will become busier in the coming time to make changes in management and risk control.
Keith Pogson, Managing Partner, Asia Pacific Financial Services at Ernst & Young said that M&As will remain an unavoidable trend because the number of Vietnamese banks is bigger than that in other countries in the region. There are two motives for M&As in Vietnam: The government allows large commercial banks to acquire smaller banks or merge into other leading banks to create powerful financial institutions in Vietnam and the region as a whole. Relevant state authorities should further improve the legal framework to promote M&As between commercial banks, Keith Pogson was cited as saying.
According to Nguyen Thi Vinh Ha, Deputy General Director of Grant Thornton Vietnam, leading groups would withdraw capital from commercial banks and commercial banks will take the initiative in finding foreign strategic partners; a number of large banks could be merged according to guidelines and instructions of the State Bank to become powerful, regionally-competitive commercial banks.-VNA
Since the credit institution restructuring plan for the 2011-2015 period was kicked off almost four years ago, all M&A cases in the banking sector were implemented on a voluntary basis.
According to the State Bank of Vietnam, all the weaker banks that were restructured via M&As operated more effectively than previously. Their operational safety indexes and solvency improved. They attracted more deposits. Problems of bad debts were minimized, while violations related to stake holding rates of major shareholders and credit provision were being dealt with, and the banks’ organization and operations were strengthened.
Since early this year, there have been many M&A cases in the banking sector. Small commercial banks merged with each other or merged into larger banks. Well-known cases included M&As at Southernbank, DongAbank, Sacombank and Eximbank.
KPMG Vietnam and Cambodia Chairman John Ditty said at a recent M&A forum that finance, fast-moving consumer goods, insurance and telecommunications remained the core of M&A activities. If the economy grows strongly, M&A will become busier, the scale of M&As in the banking sector would change and provide more opportunities for investors, John Ditty was quoted as saying.
The second wave of M&As hasn’t only seen weak banks merge, larger banks have merged to create joint strength. M&As between non-banking institutions, such as finance and financial leasing companies will be promoted in the coming time. Experts have predicted that the second wave of M&As in the banking sector will become busier in the coming time to make changes in management and risk control.
Keith Pogson, Managing Partner, Asia Pacific Financial Services at Ernst & Young said that M&As will remain an unavoidable trend because the number of Vietnamese banks is bigger than that in other countries in the region. There are two motives for M&As in Vietnam: The government allows large commercial banks to acquire smaller banks or merge into other leading banks to create powerful financial institutions in Vietnam and the region as a whole. Relevant state authorities should further improve the legal framework to promote M&As between commercial banks, Keith Pogson was cited as saying.
According to Nguyen Thi Vinh Ha, Deputy General Director of Grant Thornton Vietnam, leading groups would withdraw capital from commercial banks and commercial banks will take the initiative in finding foreign strategic partners; a number of large banks could be merged according to guidelines and instructions of the State Bank to become powerful, regionally-competitive commercial banks.-VNA
