Sacombank merges with Southern Bank

Representatives of Sacombank and Southern Bank conclude a merger deal today, with the witness of officials from the central bank and the southern bourse.-Photosacombank.com.vn

Sacombank said in an online report that the merger has helped it stand among the largest domestic banks, with total assets amounting to VND297 trillion (US$13.2 billion) and a charter capital reaching VND19 trillion ($838 million).

The bank now has more than 560 transaction points nationwide and in Laos and Cambodia, with the number of employees totaling some 15,500.

The bank said the supplement resources will enable it to broaden operational scales, improve service quality and enhance the ability to pump capital into the market.

It added that it had scrutinised schemes to stablise post-merger issues, including staff, finance, business and risk management.

"Normally, banks cannot avoid certain challenges in the initial phase after a merger, such as how to harmonise business cultures, combine accounting and information technology systems, and dealing with human resources," Sacombank Chairman Kieu Huu Dung said.

"However, these are short-term issues that are not very difficult to handle. In the long run, mergers and acquisitions always benefit both sides of the deals, as well as shareholders, customers, the society and the State," he said.

Today, Sacombank announced that it had issued 400 million shares to swap with the shares of Southern Bank, along with another 242.75 million shares for other purposes related to dividend payment, buybacks and bonus shares.

It said the shares will be distributed within three months after the State Securities Commission certifies the issuance, on September 30, while the cut-off date for participants is October 20.

Southern Bank, which had VND4 trillion ($178 million) in equity, said on September 30 that every share of this bank, with a face value of VND10,000 (44 cents), will be changed into 0.75 of a share of Sacombank.

State Bank of Viet Nam (SBV) Deputy Governor Nguyen Phuoc Thanh said the merger of Southern Bank and Sacombank was in line with the national policy to restructure the banking system, creating a new institution that is healthy and capable enough to expand overseas.

He noted that Sacombank now ranks fifth in the top five domestic banks, just after the major lenders with State stakes, such as Vietcombank, Vietinbank, BIDV and Agribank.

Southern Bank had been among the fragile lenders that were to be reorganised as required by the SBV. However, the bank had found it impossible to implement the restructuring on its own.