The State Bank of Vietnam (SBV) has approved a merger between unlisted Maritime Bank and Mekong Development Bank (MDB), the two banks said in statements on Monday, as the country seeks to consolidate a banking sector made up of more than 40 banks.
Economists consider the banking sector as overcrowded, with too many small and under-capitalized lenders, and the Vietnamese authorities are trying to clean up bad loans that are dragging on the economy following injudicious lending during a decade of rapid expansion.
The forthcoming merger will bring together MDB, a bank based in the Mekong Delta province of An Giang, and Hanoi-based Maritime Bank.
The central bank has allowed three mergers and acquisitions among domestic banks since early 2012 as part of efforts to reform the banking sector.
Earlier this month, the central bank acquired all the shares in Vietnam Construction Bank, based in Long An Province.
Central bank data shows bad debts in the banking system edged up to 3.88 percent of total loans as of November 2014, from 3.87 percent the previous month, though independent economists believe the figure could be far higher.