Five to eight banks to be merged in 2012

January 12, 2012 | 09:15

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Five to eight more banks will be involved in merger in 2012 as part of the process of restructuring credit institutions, said Governor of the State Bank of Vietnam (SBV) Nguyen Van Binh.

Mr Binh made the statement at a conference on external economic affairs in Hanoi on January 11.

He said the merger will help strengthen financial capacity and improve transparency in the banking system in 2012. The process should be carried out along with building people’s trust in the domestic currency (VND) as well as strengthening the forecast capacity of monetary institutions.

Late last year, three banks Sai Gon, De Nhat and Tin Nghia were merged under the sponsorship of the Bank for Investment and Development of Vietnam. After merging, the chartered capital of the new bank is more than VND10,580 billion.

As of January 1, 2012, the new bank, named Saigon Joint Stock Bank Commercial Bank (SCB), began operation.

Binh said that the continuous decrease in inflation over the past months has laid an important foundation for reducing interest rates to help businesses ease capital sources.

He added, however, that more time is needed to ensure this trend will benefit businesses.

The governor assures that there will be no change in the interest rate until the the end of the first quarter of the year. The central bank will consider a reduction in interest rates after balancing other macro-economic factors, said Binh.

In the long-term, Binh said that Vietnam should build an effective capital market to maintain a sufficient supply of capital for businesses. According to him total social investment makes up around 44 per cent of GDP while the savings rate is only 20 per cent. As a result, he said, there is a shortage of capital resources for businesses.

VOV

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