Three Vietnamese banks get approval to merge

Ficombank, Ting Nghia Bank and Saigon Commercial Bank have received approval to merge.

These are the first three banks that have been allowed to merge since the State Bank announced the policy of comprehensive restructuring of the banking system in October.

“At the first step in the process of the bank system restructuring in line with the direction of the Vietnamese Party and Government, this morning the SBV has passed a policy to merge these three banks headquarters in Ho Chi Minh City”, said State Bank of Vietnam Governor Nguyen Van Binh.

According to Binh, recently, these three banks have faced liquidity problems mainly due to using short-term capital for long-term loans. When short-term funds were no longer abundant, the banks have lost temporary solvency.

“The State Bank actively supported liquidity for the three banks, so the situation now has become more stable. These banks met and came to a decision to merge voluntarily, in order to promote each other’s strengths, support for each other, and reduce operating costs in order to create a new stronger bank, with capacity to access to larger and wider markets, ” Binh said.

Binh added: “The Bank for Investment and Development of Vietnam will comprehensively participate in the new bank after merged, from the management board, the executive board and other key divisions. As a representative of the state capital, BIDV will have to ensure not letting the post-merged bank go bankrupt, to ensure the legitimate interests of depositors, thereby stabilizing the macro economy as well as political and social security in HCM City and nationwide”.

Governor Binh said, from now until the end of the first quarter in 2012, the central bank will complete the review, re-arrangement and classification of banks according to their health status to take appropriate measures.