VietinBank may join with unlisted OceanBank, the central bank said. Photo: Bloomberg
Some of Vietnam’s lenders may merge with each other this year as part of efforts to help to clean up the country’s fragmented banking sector, which is weighed down with bad loans after a decade of rapid expansion.
Among six to eight mergers likely in 2015, Vietnam’s biggest bank by market value, Vietcombank, could link with unlisted Saigon Bank for Industry and Trade and Hanoi-based VietinBank may join with unlisted OceanBank, the State Bank of Vietnam said in a briefing note, which was seen by Reuters.
BIDV could take similar steps with Mekong Housing Bank and VietinBank could also merge with Petrolimex Bank, according to the central bank note.
The central bank later said the details of possible mergers were not official, and any mergers or acquisitions would be formally announced to the market.
“It is not official information from the central bank,” Le Thi Thuy Sen, deputy head of the bank’s communications division, said in an emailed statement.
Vietnam’s banking sector has 42 local lenders and economists consider it is overcrowded, with too many small and under capitalized operators.
The central bank has already eased foreign ownership constraints and set up an asset management company to buy up bad debts and reduce banks’ bad loan ratios.
“The positive side of these mergers is it uses big banks to force restructuring in small lenders and takes advantage of the financial capability of the big banks to support liquidity,” Do Thien Anh Tuan, an economist at the Fulbright Economics Teaching Programme in Ho Chi Minh City, said.
Other mergers in the works include Maritime Bank with Mekong Development Bank, and Sacombank with Southern Bank preparations for which began last year.
Banks’ non-performing loans were 3.87 percent of total loans in October 2014, according to central bank data. The government is aiming to cut non-performing loans to 3 percent of loans by the end of this year.
Đăng ký: VietNam News