|
M&A in banking sector likely to start again
If the merger deal between Saigon-Hanoi Commercial Joint Stock Bank (SHB) and Hanoi Building Development Commercial Joint Stock Bank (Habubank-HBB) becomes a reality, this will start the mergers and acquisitions (M&A) wave in the second quarter of 2012.
The State Bank of Vietnam (SBV) has recently expressed its policy for the merger deal between SHB and Habubank (though it was not the final approval), which attracted the attention as well as curiosity and rumours of people.
The reason is that, a month ago, when public opinion raised rumour about the merger of these two banks, Habubank gave a denial while SHB said that it is seeking partners. Meanwhile the central bank rejected outright and said that it has not received any reports of these two banks. By this time, although the central bank and the leaders of the two banks have not officially confirmed the information, the information from stakeholders showed that this deal is clearer.
In a talk with the local newspaper Bao Dau Tu (Vietnam Investment Review), a leader of SHB said that the final decision will have to wait for announcement from the central bank. The bank will official disclose information at the annual general meeting (AGM) by the end of this month.
Meanwhile, a source from Habubank said that all agreements between the two partners are still being conducted at the highest leadership level. After the AGM of Habubank (scheduled before April 15, 2012) the relevant information will be clearer.
The ambiguity of both "parties" has given the investors more reasons to confirm that the M&A deal will eventually happen sooner or later and the remaining problem is to wait for final approval from the central bank. Of course, in addition to the central bank's approval, the deal still must be agreed by shareholders of the two parties and get the nod from the State Securities Commission to offer share for the stock swap between the two banks according to the ratio agreed by both partners.
Besides, the move of SHB and Habubank can be considered as part of the central bank's roadmap to deal with banks in the group 3 and 4 to make the banking system healthy. Earlier, Habubank has been classified in the group 3 (below average banks) by the central bank.
The merger between SHB and Habubank has been rumoured long before. Together with these two banks, the market also appears rumour about many M&A deals of other banks.
In fact, the M&A deals are consistent with the central bank's policy in handling weak banks. In early 2012, the SBV Governor Nguyen Van Binh affirmed that the central bank will merge 5-8 banks in Q1/2012. However, Q1 ended but there have not been any M&A deals of banks being announced yet.
The central bank deputy governor Nguyen Dong Tien said the M&A activities of banks are carried out expeditiously and the disclosure is slower than expected as the consolidation process of banks is very complex and it needs to handle many technical problems.
Thus, the consolidation for 5-8 ailing banks as announced by the SBV governor will happen in the second quarter this year, of which the M&A deal between SHB and Habubank can be the opening shot of 2012. Economist Vo Tri Thanh also affirmed that "as for me, the central bank will handle weak banks within next 1-2 months".
Currently, the market also raised many rumours that Ocean Commercial Joint Stock Bank (OceanBank) is promoting to buy stake into another lender. But, the bank still denied this and said that there is no official information. Likewise, Dong A (Eastern Asia) Commercial Joint Stock Bank (DongABank-EAB) after announcing to seek partner for the merger also said that this is only its idea. Meanwhile, Asia Commercial Joint Stock Bank (ACB) although gave affirmative of not joining the acquisition process of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank-STB) also confirmed that mergers and acquisitions are the bank's focus orientation in the near future.
Of course, the deal hitting the most attention at this time (following the deal of Habubank and SHB) is still between Vietnam Export Import Commercial Joint Stock Bank (Eximbank-EIB) and Sacombank, which is expected to be confirmed at the annual general meeting of Sacombank (scheduled in Q2/2012).
Another trend being considered by more banks in the M&A wave of banks in 2012 is to sell shares to foreign partners. In 2011, many banks offered successfully 5-20 percent of stake to foreign partners, such as Southern Bank, VIB and Orient Bank (OCB).
stockbiz
|
