In addition to the successful mergers and acquisitions (M&A) cases in the finance and banking sector, many cases had to say farewell for various reasons. Concerning the merger of Petrolimex Group Commercial Joint Stock Bank (PGBank) into Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank), although the merger plan had been approved in the annual general meeting (AGMs) of both banks in the previous years, the result was not as expected. At its AGM in April 2018, VietinBank reported to its shareholders the termination of the merger plan with PGBank. According to VietinBank, since the negotiation process lasted for a long time while the market changed rapidly, the two parties could not reach a consensus.
After the unsuccessful M&A with VietinBank, PGBank has approved the merger plan with Hochiminh city Development Commercial Joint Stock Bank on April 21st 2018 with a swap ratio of 1:0.621. HDBank kept the plan to merge with PGBank in secret and only approved until the last minute at its AGM which was held on the same day with PGBank’s.
Previously, the merger deal between Saigon Commercial Joint Stock Bank for Industry and Trade (Saigonbank) and Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) was mentioned in 2015 and seemed to be completed soon after it was approved in principle. However, the case failed as the major shareholder of Saigonbank Hochiminh city People’s Committee did not agree to merge, although Saigonbank’s current leaders are all from Vietcombank. After this unsuccessful deal, Saigonbank said that it would conduct self-restructuring, but so far it has not been able to raise the charter capital to more than three trillion dong. According to analysts, without carrying out M&A deal, Saigonbank can hardly survive. At this point, when the AGM season has passed, Saigonbank is yet able to hold its AGM. As expected, the AGM will take place in June, but relevant information has not been disclosed. Meanwhile, there is information that the bank is considering an M&A deal with another large bank.
Before Dong A Commercial Joint Stock Bank (DongA Bank) was put under special control in August 2015, it was rumoured that DongA Bank and An Binh Commercial Joint Stock Bank (ABBank) will soon conduct M&A. However, when the plan was not yet implemented, DongA Bank fell into a special control status. Not only ABBank, Kinh Do Corporation which was rumoured to pour one trillion dong into DongA Bank also quickly quit.
Export Import Commercial Joint Stock Bank (Eximbank) and Saigon Commercial Joint Stock Bank (Sacombank) signed a comprehensive cooperation agreement in early 2013. Sharing about the merger plan between Sacombank and Eximbank, Le Hung DungEximbank’s Chair of Board of directors at that time said that the bank initially expected to only invest in Sacombank as it has done with some other banks for the purpose of making profit, but it later found that it should “stay longer” for some issues.
However, this M&A deal soon failed because many people questioned whether the merger between Eximbank and Sacombank is for increasing competitiveness or mainly for gaining power and group interests? Early this year, Eximbank fully divested more than 7 percent investment at Sacombank, in accordance with Circular 36/2014/TT-NHNN and earned hundreds of billion dong in profit.
The information about the merger between Nam A Commercial Joint Stock Bank (NamA Bank) and Eximbank was rumoured since 2014, especially when the two leaders both resigned at NamA Bank to become candidates for the selection of Eximbank’s BOD on 2015-2020 term and represent for over 10 percent of voting shares at Eximbank.
However, NamA Bank has then followed the self-restructuring path under the approved plan and has no plan to merge with other banks, including Eximbank. Recently, the market has recently raised information about this M&A deal when Luong Cam Tu NamA Bank’s former general director was approved by the central bank to join Eximbank’s BOD for the term of 2018-2020.
Dr Tran Du Lich, a banking and economic expert believed that with the policy of accelerating the restructuring of the banking sector of the central bank and the government, many weak banks had to carryout such as First Commercial Bank (Ficombank), Great Trust Commercial Bank (TinNghiaBank), Dai A Commercial Bank (DaiABank), Southern Commercial Bank (SouthernBank), Hanoi Building Commercial Bank (Habubank), Mekong Commercial Bank (Mekongbank), and even Mekong Housing Commercial Bank (MHB). Nevertheless, the sector’s restructuring process has not yet ended and the M&A wave will continue when some small banks are facing difficulties in enhancing financial capacity.
