DongA Bank has reportedly signed a merger agreement with An Binh Bank. Photo: D.D. Minh
At least six mergers and acquisitions are being planned among commercial banks in Vietnam, where three similar deals have taken place this year as part of the government's efforts to consolidate the overcrowded banking sector.
A source told Thanh Nien that DongA Bank has signed a merger agreement with the smaller An Binh Bank.
However, Nguyen Hoang Minh, vice director of the State Bank of Vietnam's branch in HCMC, where both the banks are headquartered, said officials have not received the banks' proposal yet.
DongA Bank chairman Cao Sy Kiem said the lenders were still in a "study process."
In another related news, at a recent meeting, Vietinbank's leaders announced that a merger agreement with PGBank is awaiting the central bank's approval.
Once the plan is ratified, as early as next month, 270 million shares of Vietinbank will be swapped for PGBank's 300 million shares.
Thanh Nien also learned that shareholders of Sacombank and Southern Bank have voted for a merger and their plan is now pending government approval as well.
Eximbank, another major lender, is likely to strike a deal with Nam A Bank.
Previously, the central bank approved a merger between Mekong Development Bank and Maritime Bank, and planned a tentative deal for SaigonBank and Vietcombank.
Mekong Housing Bank is also working with BIDV, the country's second-biggest partly private bank by assets, on their merger.
The State Bank has already taken over Ocean Bank, whose executives were arrested over lending violations, and cash-strapped Vietnam Bank for Construction, after its shareholders refused to pump in more money.
The central bank did not pay for these compulsory purchases. Under a regulation issued in September 2013, the monetary authority can restructure a weak lender by acquiring its shares.
Since 2012 the State Bank has tried to reform the banking sector made up of more than 40 banks, many laden with problems. The overcrowded industry has been blamed for dragging on the economy with bad debts.
As of February, outstanding loans of the whole system was estimated at nearly VND4,000 trillion (US$184.88 billion).