Customers at Vietinbank's office in northern Son La province (Photo: VNA) Hanoi (VNA) - Vietinbank and PG Bank did not finalise procedures to merge in 2015 as planned, according to Vietinbank's Chairman Nguyen Van Thang.
Thang attributed the delay to several reasons including hindrance in administrative procedures. However, he said, the merger will have to be completed in the first quarter this year.
The merger will increase Vietinbank's total assets by 25 trillion VND (1.1 billion USD) to 685 trillion VND (30.4 billion USD) and its charter capital by 3 trillion VND (133 million USD) to more than 40 trillion VND (1.7 billion USD).
Besides, with a comprehensive co-operation agreement with Petrolimex – PG Bank's strategic shareholder – Vietinbank also expected to develop its consumer market, thanks to Petrolimex's stable customer base.
Besides the merger with PG Bank, the State Bank of Vietnam (SBV), in the first half of last year, also appointed Vietinbank to manage GP Bank and Ocean Bank, which it put under special control after acquiring 100 percent of their stakes due to their weak performance and violations.
According to Thang, the financial status of GP Bank and Ocean Bank has improved significantly.
In contrast to concerns that depositors would withdraw their deposits from the two banks, Ocean Bank's capital mobilisation last year surged 17 percent and the rise in GP Bank was 3 percent.
Under the Vietinbank's management, the retrieval of non-performing loans of Ocean Bank and GP Bank was also positive. Ocean Bank last year retrieved 5 trillion VND (219 million USD) and made a profit. GP Bank has so far not released its financial report as it was restructured later than Ocean Bank.
The central bank has also reduced its special control on Ocean Bank and GP Bank thanks to the improving liquidity and business performance of the banks.
SBV Chief Inspector Nguyen Huu Nghia said after the acquisition, that the commercial banks did not need special loans from the central bank to pay depositors.
Nghia said the performance of the banks in general had so far been stable and had improved, especially in terms of their liquidity. The banks' liquidity reserves by October last year reached roughly 10 trillion VND (444 million USD) thanks to a rise in new deposits.
The significant liquidity reserve status was one of the causes that allowed the SBV to start reducing its special supervision of the banks, Nghia said, and added that SBV would allow the commercial banks to resume their lending in several safe sectors.
According to the SBV, besides the improvement in corporate governance, NPLs and non-profitable assets of the banks have also been initially handled and retrieved.
Thang affirmed that Vietinbank would continuously implement drastic restructuring measures in a move to improve the performance of ailing banks.-VNA
