Acting for the greater good of banking

>> Banks in firing line

Could the merger entail changes to the local banking system?

Bank mergers are commonplace in the monetary market. Bank merger and consolidation issues were talked about by the prime minister as well as State Bank governor.

The State Bank gave the go-ahead for these three banks to get into mergers. Perhaps, the relevant legal framework is still incomplete, but we are in a position to make the financial and banking market healthier.

Some people may be concerned the merger will make depositors anxious and decide to take back their money. There will be no risk to banking system security. Money flows are circulating very well among banks. In my view, the local banking market remains stable after the mergence. One thing is the shareholder dividend will be changed based on new bank profit figures.

These three banks did not operate effectively in the past year and lost liquidity. Will the merger help tackle the situation?

Amid a turbulent economy, businesses face multiple risks and banks are sometimes illiquid, that is nothing abnormal. How banks handle their issues is more important. Inter-bank market coming into existence is to help banks increase liquidity.

BIDV was appointed to comprehensively participate in these three banks’ merger process as a state capital representative. Earlier, BIDV backed up the liquidity of several other banks. Is it risky when a state bank supports several banks’ liquidity?

It is usual. Banks take on the task when they know they are in a position to do so. They are not obliged to do that.

How will these three banks’ trademarks be dealt with after merger?

One should look at contracts these banks sign with the BIDV when it comes to their trademark protection. I think these banks should think of market division based on their actual management capacity, branch network and human resources to bring forth each bank’s advantages.

For example, after the merger, SCB may play the role of a bank for the poor and those with start-up business procedures in urban cities through providing small credit packages.