WHOLESALE BANKING | Cesar Tordesillas, Vietnam

Vietnam bank merger deals expected to mushroom

State Bank of Vietnam's efforts to speed up the bank restructuring process is expected to lure five to eight banks in mergers this year.


Mr. Toshifumi Iwaguchi, Managing Director of Recof affirmed that Japanese investors were extremely interested in M&A deals in Vietnam.

Japan’s Mizuho Financial Group agreed to buy a 15% stake in Vietcombank, Vietnam’s largest listed bank, opening up opportunities for more M&A deals between Vietnam and Japan in the coming time.

Experts forecast that there will be more M&A contracts between Vietnamese banks and foreign partners.

Albert Ng, chairman of Ernst & Young China suggested Vietnamese banks consider M&A as good chances for them to improve administrative competence, learn about modern technology and widen scale of services.

Under the Government’s national banking restructuring project, banks are encouraged to merge with other ones or with healthy credit institutions.

M&A activities in Vietnam's banking sector began after the Government had ordered the restructuring of the commercial bank system and financial institutions via M&A in a “voluntary manner”.

The move targets to stabilize liquidity for new banks; rationalize their operations and improve administrative competence without hampering monetary policies.

The first voluntary M&A deal occurred last December between three unlisted and privately owned banks namely First Commercial Joint-Stock Bank, Tín Nghia Commercial Joint-Stock Bank and Sài Gòn Commercial Joint-Stock Bank to bolster their liquidity and cut operation costs.

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