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SCB, TinNghiaBank, Ficombank to merge: Report
Three small banks in southern Vietnam, which have faced a liquidity crunch, will merge to form a larger bank, a state-run news website quoted the central bank governor as saying on Tuesday, the first move to restructure the nation's banking sector.
Vietnam's economy, which has been struggling with the highest inflation in Asia, is beginning to stabilise but it has more to do and "vulnerabilities in the financial sector need to be addressed without delay," the International Monetary Fund said on Tuesday.
The three banks, all based in Ho Chi Minh City, have temporarily lost payment ability and have agreed to merge after the State Bank of Vietnam's cash injection, governor Nguyen Van Binh was quoted by the VNExpress website (vnexpress.net) as saying.
State-owned BIDV, Vietnam's second-largest lender by assets, has been assigned to control the shares owned by the state in the new bank, Binh said at a briefing in Hanoi on Tuesday.
"This morning the State Bank has approved the merge of three banks based in Ho Chi Minh City, namely De Nhat (Ficombank), Tin Nghia (TinNghiaBank) and Saigon Commercial Bank (SCB)," Binh was quoted as saying. De Nhat is the Vietnamese name for The First Commercial Bank, or Ficombank in short.
"The central bank has supported the banks' liquidity so the situation is better," he said, adding the merger was reached on voluntary basis.
BIDV's ROLE Binh said the cost of restructuring the three banks was not immediately available. He said BIDV will prevent the new bank from going bankrupt.
Last month Binh told the National Assembly that the central bank was working on a project to restructure the domestic banking sector and will allow mergers among ailing banks. The process would last until 2013, Binh has said.
The three banks, which don't have any foreign investment in them, are among Vietnam's 40 partly private lenders. The total assets of the three stood at a combined 154 trillion dong ($7.33 billion) as of Sept. 30, or 38 percent of BIDV's total assets.
For a table of banks' assets, click Hanoi-based BIDV, or the Bank for Investment and Development of Vietnam, said it will sell 3 percent of its shares in an initial public offering on Dec. 28 before selling a 15 percent stake to a foreign strategic investor.
REUTERS
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