A branch of Military Bank in Hanoi. Photo: Ngoc Thang
Military Bank, Vietnam's sixth largest partly private bank, has announced its plan to acquire Song Da Finance Joint Stock Company, in which it currently owns a 11 percent stake, local media reported on Tuesday.
The acquisition was set to take place this quarter, when the bank issues around 31 million shares, worth VND10,000 (43 US cents) each, to swap with the shares of Song Da company at a ratio of 1 to 2.2.
Military Bank expected the deal to raise its charter capital to more than VND16.31 trillion ($715.22 million), up 40.7 percent from the estimate in the second quarter.
Local media said Song Da, which was founded in 2008 by Military Bank, state-owned construction business Song Da Corp and Bao Minh Insurance, was seeing continued declines in its profits and increases in non-performing loans.
The finance company's net profit was over VND653 million ($28,600) in the first half this year, down 75 percent from the same period last year.
Its bad debt reached 12 percent of total loans on June 30.