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RETAIL BANKING | Cesar Tordesillas, Vietnam

Merger rumours between Sacombank, Eximbank getting louder

Increased share activity and chairman's departure.

These circumstances increased Speculation about the potential merger of Sacombank and Eximbank.

On Tuesday, 21.3 million Exibank shares swapped hands at a value of VND15,300 or US$0.7 each. Sixty-three million stocks were traded in three successive sessions from October 29 to November 1.

During the last two months, 298 million EIB shares worth more than VND1.6 trillion or $76.1 million, were traded, accounting for 13 per cent of the bank's charter capital.

Meanwhile, the total amount of traded Sacobank shares reached 95.6 million units, with a value of over VND1.8 trillion or $85.7 million, equivalent to 17.37 per cent of the charter capital.

Although huge volumes of shares were exchanged, there was virtually no information disclosed about the transactions, prompting rumours of a merger in the pipeline that further developed after the resignation of Sacombank founder and chairman Dang Van Thanh.

However, Sacombank's newly appointed chairman Pham Huu Phu has argued that the bodies behind large transactions are not required to disclose information.

Investors have not been satisfied with this answer, because they know the Securities Depository Centre must have the transaction details, as it is responsible for managing all investor accounts.

There have been many cases in Viet Nam of illicit trade in shares.

Phu also refused to confirm that the increased share activity was linked with Thanh's resignation, which caused the VN-Index to fall sharply and saw market value evaporate by over $1 billion.

"It is possible that large investors knew about the changes in personnel in advance, and they started collecting shares hoping for a good price level in the case of a probable merger," a securities analyst said.

Eximbank chairman Le Hung Dung, representing the group of large shareholders in Sacombank, recently admitted his bank was planning for a merger with another lender.

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