Vietnam's central bank has given approval for SHB to take over troubled lender Hanoi Building Commercial Joint-Stock Bank (Habubank), the second M&A deal in the banking sector in less than a year.
The State Bank of Vietnam signed its approval late on Tuesday, completing the takeover on a voluntary basis to form a new lender, Chief Executive Nguyen Van Le of Hanoi-based SHB, formally known as Saigon-Hanoi Commercial Joint Stock Bank, was quoted by local media as saying.
Soaring inflation and the collapse of the property market have led to unsustainably high loads of bad debt at a number of Vietnamese banks, and the central bank last year launched a plan to restructure the sector through mergers and acquisitions of the weakest lenders.
In December the central bank arranged for three weak lenders to merge, and governor Nguyen Van Binh has said eight to 10 banks would be merged this year.
In early May SHB shareholders agreed on the takeover plan, after which the new lender's name remains SHB, with registered capital of nearly VND9 trillion ($432 million), the bank said in a resolution after an annual meeting on May 5.
In late April Habubank's shareholders had also approved the plan at an annual meeting.