Restructuring to boost M&A in banking industry

Weak banks that are restructuring will be the target of merger and acquisition (M&A) deals in the near future as the Government is strongly promoting the restructuring of the country’s finance and banking industry.

Restructuring to boost M&A in banking industry hinh anh 1

A transaction office of Military Bank in Hanoi. Military Bank will receive the transfer of Ocean Commercial Bank (OCB). (Photo vnbusiness.vn)

Weak banks that are restructuring will be the target of merger and acquisition (M&A) deals in the near future as the Government is strongly promoting the restructuring of the country’s finance and banking industry.

News portal vnbusiness.vn quoted Yoshizawa Toshiki, board member at Orient Commercial Joint Stock Bank, as saying that M&A activities will increase sharply after the pandemic, of which M&A in finance and banking in Vietnam will be better.

Currently, the Vietnamese Government has policies such as equitising State-owned enterprises and banks, and restructuring weak, undercapitalised and substandard banks. This is an opportunity for foreign organisations to make investments. Japan’s medium-sized banks are also considering the financial market and M&A in Vietnam, Toshiki said.

Warrick Cleine, chairman and CEO of KPMG in Vietnam and Cambodia, quoted by vnbusiness.vn, also said M&A activities in the financial and banking sector slowed in the first ten months of 2022, but he expected the sector will be the target of M&A transactions from 2023.

It is positive that many foreign investors are interested in the sector. They have a certain confidence in the Vietnamese market and businesses, Warrick said, adding many CEOs are also considering M&A as an important way for them to change their business model more effectively.

A typical deal is that VPBank expects to sell 49% of FE Credit shares to Japan’s Sumitomo Mitsui Banking Corporation (SMBC). At the same time, VPBank has increased the maximum foreign ownership ratio from 15% to 17.6% of charter capital. Though the time to complete the capital sale plan has not been disclosed, a representative of VPBank said it would be implemented between 2022 and 2023.

Besides the bank share purchase of foreign investors, M&A activities among domestic enterprises are forecast to boom in 2023 under the Government’s compulsory plan of transferring weak banks next year.

Though no name has been officially announced, with the recent moves of commercial banks, it can be seen that a number of deals have almost been decided, according to vnbusiness.vn. For example, Military Bank and Vietcombank might receive the compulsory transfer of Ocean Commercial Bank (OCB) and CBBank, respectively, while DongA Bank and GP Bank might be transferred to HDBank and VPBank, respectively.

The M&A form of weak banks is completely different from previously. Accordingly, weak banks will be merged with big banks under the parent-subsidiary model. The transferred weak banks will operate in the form of one-member limited liability banks where the parent bank is the owner of 100% of the charter capital.

The subsidiary banks have legal entities that are independent of the parent banks, and do not carry out consolidation of financial statements with the parent banks. Besides, the subsidiary banks’ calculation of capital adequacy ratios, pidend policy, profit distribution and provision of funds are also independent from parent banks.

Tim Evans, CEO of HSBC Vietnam, quoted by vnbusiness.vn, said M&A deals in the Vietnamese banking industry would be better in the next few years, with drivers coming from both foreign investors and domestic commercial banks. The banking and finance sector in Vietnam is emerging as a bright spot to attract the attention of large financial groups in the world while Vietnamese banks also have the need to increase capital and seek strategic partners to improve risk governance, operational efficiency, technology and digitalisation.

Financial analysts said the trend of digital transformation is increasingly strong in the economy and businesses are accelerating the speed of transformation. New business models are increasingly appearing to cause fiercer competition. The change will affect the M&A trend in the financial and banking markets./.

Source: VNA
en.vietnamplus.vn

Related News

The supporting industry needs high-tech human resources

The supporting industry needs high-tech human resources

VCN - The trend of shifting supply chains is opening up many opportunities for the domestic supporting industry to develop; the problem of human resources is becoming more urgent so that businesses can improve production capacity and self-sufficiency competitiveness by meeting the increasing requirements of the value chain.
Semiconductor industry needs 50,000 high-quality workforce in next 10 years

Semiconductor industry needs 50,000 high-quality workforce in next 10 years

Vietnam's workforce demand in the semiconductor–microchip field is forecast to be around 20,000 engineers for the next five years, and 50,000 engineers in the next 10 years, according to economists from the Fullbright University.
Vietnam making new moves in multibillion-dollar semiconductor industry

Vietnam making new moves in multibillion-dollar semiconductor industry

Vietnam is making strong progress in advancing its standing in the global semiconductor supply chain as many of the world’s largest chip manufacturers have landed in the Southeast Asian nation, insiders said.
The market is shifting, forcing the industry to speed up to adapt

The market is shifting, forcing the industry to speed up to adapt

VCN - A series of new policies from the import market pose many challenges for domestic export businesses, in which textiles, furniture and household appliances are directly affected industries.

Latest News

Developing State budget estimates for 2025: carefully taking factors increasing, decreasing and shifting revenues into account

Developing State budget estimates for 2025: carefully taking factors increasing, decreasing and shifting revenues into account

VCN - The Ministry of Finance is developing a circular guiding the development of state budget estimates for 2025 and the 3-year state budget and financial plan for the 2025-2027 period; 5-year financial plan for the 2026-2030 period.
Ministry of Finance proposes seven solutions for combating tax evation for e-commerce

Ministry of Finance proposes seven solutions for combating tax evation for e-commerce

VCN - Vietnam e-commerce will reach US$30.5 billion in 2035 hence according to Minister of Finance Ho Duc Phoc, it will pose challenges to the management of tax, quality of goods, and anti-fraud.
Banks are ready to deploy biometric authentication

Banks are ready to deploy biometric authentication

VCN - According to Decision No. 2345/QD-NHNN dated December 18, 2023 of the State Bank, which will take effect from July 1, money transfer transactions over 10 million VND/time or over 20 million VND/day will require facial authentication. Accordingly, banks are urgently preparing to be ready to implement new regulations within the set deadline.
Review the tax payment of sales livestream individuals

Review the tax payment of sales livestream individuals

VCN - The General Department of Taxation has just issued an official letter directing local tax departments to drastically manage e-commerce taxes and electronic invoices generated from cash registers.

More News

13 cases subject to direct tax registration with Tax authority

13 cases subject to direct tax registration with Tax authority

VCN – The Ministry of Finance collects comments on a draft Circular guiding tax registration to replace Circular 105/2020/TT-BTC. According to the draft, if the National Population Database
Ministry of Finance: Focusing on improving independent audits

Ministry of Finance: Focusing on improving independent audits

VCN - According to Minister of Finance Ho Duc Phoc, in recent times, the Ministry of Finance has focused on improving the quality of independent audits through training, inspection, and examination.
Digitizing the process, banks actively lend online

Digitizing the process, banks actively lend online

VCN - Many banks promote online lending to save time and costs for both parties and creating conditions to promote credit growth.
The finance sector

The finance sector's firm stance on combating tax evasion in e-commerce

VCN - Addressing and clarifying some opinions raised by National Assembly deputies during the questioning session on issues related to the commerce and industry sectors on the afternoon of June 4, Minister of Finance Ho Duc Phoc stated that in the coming period, the finance sector would rigorously enforce tax collection on e-commerce to ensure fairness in the fulfillment of taxpayers' obligations.
Total State revenue managed by Tax sector is estimated at VND767,415 billion

Total State revenue managed by Tax sector is estimated at VND767,415 billion

VCN – The total state revenue in the first five months of 2024 managed by the Tax authority is estimated at VND 767,415 billion, meeting 51.6% of the target and 114.9% year-on-year.
Tax sector cooperate with Police agency to prevent fraud of tax invoice

Tax sector cooperate with Police agency to prevent fraud of tax invoice

VCN - Over the years, the acts of law violation on electronic tax invoices took place complicatedly with many different tricks. To prevent fraud, the tax sector has applied several drastic measures, including strengthening cooperation with the Police agency.
Over 4.49 billion USD raised through G-bond auctions in five months

Over 4.49 billion USD raised through G-bond auctions in five months

The State Treasury mobilised more than 127 trillion VND (4.49 billion USD) from G-bond auctions on the Hanoi Stock Exchange (HNX), or 31.76% of the annual plan.
Five-month budget revenue reached half of the whole year 2024 revenue estimate

Five-month budget revenue reached half of the whole year 2024 revenue estimate

VCN - According to the Ministry of Finance, in May 2024, total state budget revenue is estimated to reach VND150.9 trillion. In the first five months of 2024, total budget revenue is estimated to reach VND898.4 trillion, equal to 52.8 percent of the estimate.
Bank savings of individual customers recover while institutional savings decline

Bank savings of individual customers recover while institutional savings decline

Deposits of individual customers at banks have increased again since February this year, after declining in January, the latest statistics from the State Bank of Vietnam (SBV) showed.
Read More

Your care

Latest Most read
Developing State budget estimates for 2025: carefully taking factors increasing, decreasing and shifting revenues into account

Developing State budget estimates for 2025: carefully taking factors increasing, decreasing and shifting revenues into account

VCN - The Ministry of Finance is developing a circular guiding the development of state budget estimates for 2025 and the 3-year state budget and financial plan for the 2025-2027 period; 5-year financial plan for the 2026-2030 period.
Ministry of Finance proposes seven solutions for combating tax evation for e-commerce

Ministry of Finance proposes seven solutions for combating tax evation for e-commerce

Vietnam e-commerce will reach US$30.5 billion in 2035 hence according to Minister of Finance Ho Duc Phoc, it will pose challenges to the management of tax, quality of goods, and anti-fraud.
Banks are ready to deploy biometric authentication

Banks are ready to deploy biometric authentication

VCN - VPBank recommends that, to avoid transaction interruptions, customers proactively update their account information according to their chip-embedded citizen identification card before July 1.
Review the tax payment of sales livestream individuals

Review the tax payment of sales livestream individuals

The General Department of Taxation has just issued an official letter directing local tax departments to drastically manage e-commerce taxes and electronic invoices generated from cash registers.
13 cases subject to direct tax registration with Tax authority

13 cases subject to direct tax registration with Tax authority

VCN - Notably, Article 4 of the draft Circular stipulates that taxpayers subject to direct tax registration with tax authorities include: taxpayers subject to tax registration through the interconnected single-window mechanism; Taxpayers subject to direct
Mobile Version