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Making the announcement during an interview with The Saigon Times, he said that a Sacombank shareholder meeting later this month would discuss the merger plan, which was being prepared for submission to the State Bank of Viet Nam.
Phuong Nam Bank, or Southern Bank, is among the fragile lenders that are being restructured, as required by the central bank.
"In 2013, Sacombank shareholders authorised the management board to seek a smaller bank for merger, if the conditions permit. Merging with Phuong Nam will be advantageous in terms of capital and ownership," Phu said.
"Phuong Nam also finds that it's impossible to do the restructuring by itself, and so proposed the merger. Both sides were spontaneous and the move was in line with the Government directions [to restructure the banking system]," he added.
Asked whether the merger would make Sacombank weaker, Phu said, "What Phuong Nam's financial situation is, and whether Sacombank can ‘carry' Phuong Nam…all will be clarified in the merger plan. Any merger decision will be resolved at the shareholder meeting."
"Phuong Nam will need time to revive its health before merging with Sacombank," a Sacombank shareholder told The Saigon Times on the condition of anonymity, adding that Phuong Nam was having problems related to liquidity and business efficiency.