The shareholder meeting was held on October 6 (Source: VNA) The Military Commercial Joint Stock Bank will complete its merger with Song Da Finance Company this year, the bank reported on its website after a shareholder meeting on October 6.
Military Bank (MBBank) said in its report that the merger with Song Da Finance Company (SDFC) would help the State divest from the company and assist MBBank to expand its operations in the financial market.
The ratio between SDFC shares and MBBank shares is currently 2.2:1.
After the merger, MBBank will ask the State Bank of Vietnam for approval to found a consumption finance provider MB Finance Co. Ltd. (MB Finance) with charter capital of 500 billion VND (22.2 million USD).
In the first two years, MB Finance will be equipped with facilities, personnel and a distribution network to enter the consumption finance market. The new company will expand its market share and operations, and diversify its products and customers from the third year.
Luu Trung Thai, Vice President of MBBank Board of Managers's Standing Committee, said that MBBank had been looking for the chance to merge with a financial institution for the last four years in order to expand its network and increase its customer base.
The merger with SDFC was a smart move for MBBank as the finance firm had 686 billion VND (30.5 million USD) in charter capital and 1 trillion VND (44.4 million USD) in total assets, he said, adding that MBBank had a good understanding of SDFC was also major shareholder.
Thai said that SDFC was expected to turn a profit and receive assistance from foreign partners in the first year after the merger, and SDFC shares would not be restricted from trading after they were exchanged to MBBank shares.
SDFC is a financial firm founded in 2007 by MBBank, construction firm Song Da Corporation and insurer Bao Minh Insurance Corporation.
MBBank has asked the State Bank for permission to seek strategic partners who could own up to 49 percent of MB Finance in the future.
It has also requested direct support for MB Finance in terms of financial status and liquidity in the first five years, or if MB Finance runs into liquidity problems, and preferential tax rates during the first three years after the merger.
State Bank representative Hoang Quoc Manh said the SBV supported the merger and would respond to these requests soon.
MBBank reported pre-tax profits of 2.4 trillion VND (106.7 million USD) in the first nine months of this year, equal to 76 percent of the annual target.
During the first three quarters, the bank also achieved credit growth of 12.7 percent, and its non-performing loan ratio fell to less than three percent.-VNA
