At this point, only Global Petro Bank (GPBank) has not submitted its restructuring plan in Hanoi while a rumour about M&A performed by PetroVietnam Finance Corporation (PVFC) is spreading in Ho Chi Minh City.
In early 2012, the leader of the State Bank of Vietnam (SBV) announced the intention to merge 5 - 8 banks in the first quarter of 2012. However, while the third quarter is almost over, only two banks - Habubank and SHB – have completed their restructuring plans. This is the first merger in the year.
Dau Tu (Vietnam Investment Review) on August 15 quoted SBV Deputy Governor Dao Minh Tu as saying that except for Habubank (HBB), no optimal restructuring plans for weak banks have been submitted to the State Bank for consideration.
"The SBV is actively instructing but the pace of mergers and acquisitions (M&A) depends on whether banks have optimal and suitable plans or not. At present, many banks are actively negotiating with each other on the voluntary basis. We hope the process of weak bank restructuring in 2012 will reach goals,” Tu said.
Another SBV official added that weak banks are busy with negotiating with domestic and foreign partners. But, to avoid information leakage as happened to Habubank, all banks keep negotiation process in complete confidentiality. This is also a request of the central bank for bank M&As. Moreover, some cases ended because negotiation process could not resolve disagreement in last minutes. Therefore, early information about restructuring plans is not good for the market.
According to many banking experts, some bank M&As may be reached in the last four months of 2012.
Nguyen Thi Mai Suong, Director of SBV - Hanoi Branch, said Hanoi has three banks subjected to restructuring and two have now completed their restructuring plans. Specifically, the Government approved the self-restructuring plan of TienPhongBank and Habubank has officially approved to merge on SHB.
“Currently, in Hanoi, only Global Petro Bank (GPBank) is subject to restructuring. The bank is in the process of self-handling and has not completed restructuring plan to submit to the SBV - Hanoi Branch,” said Mai Suong.
Meanwhile, in Ho Chi Minh City, PetroVietnam Finance Corporation (PVFC) is rumoured to negotiate an M&A.
Previously, PVFC CEO Nguyen Thien Bao said his firm planned to transform into a commercial bank. The transformation is done if PVFC merges with an existing commercial bank. But, there will be a legal problem if PVFC is converted into a commercial bank as Vietnam National Oil and Gas Group (PetroVietnam) will hold stakes in two commercial banks (PVFC and Ocean Bank). Legally, State-run PetroVietnam will have to divest from an entity or two entities merge together.
Many experts expressed their fear that the restructuring process may be slowed down. As soon as banks are free from liquidity risks, they will seek to delay restructuring plans. If this is the case, the system safety will be worsened. Hence, the SBV needs to add weight on the restructuring process.
DT
Vietnamese
