Restructuring drives changes in banks’ top leader positions

After four months of headless operation following the central bank (SBV)’s decision to remove former CEO Tran Phuong Binh, DongA Bank has appointed a new CEO from January 1, 2016.

Accordingly, on December 31, 2015, the bank’s Board of Directors announced the appointment of Nguyen Thanh Tung, a board member and the bank’s deputy general director, as the bank’s CEO from January 1, 2016. The decision received approval from the SBV on December 25.

Tung, born in 1966, was previously appointed by the SBV to participate in DongA Bank’s governance from September 14, 2015. Before, he was the director of VietinBank’s Ho Chi Minh City branch and has nearly 26 years of experience in credit operations at VietinBank.

Before Tung’s appointment as the new CEO, the bank’s deputy general director Nguyen An governed the bank temporarily, filling in for Binh.

A bit earlier, in mid December 2015, the Board of Directors of Eximbank, one of the largest banks in total asset value, chose Le Minh Quoc to become the board chairman for the 2015-2016 tenure after an intense extraordinary shareholders’ meeting.

There were even rumours that Eximbank’s chairman might even be changed. The bank has yet to announce the new board chairman, saying that they are waiting for SBV approval.

Similarly, the merger of small player Phuong Nam Bank (Southern Bank) and Sacombank, one of the country's largest partly-private lenders, was completed and Sacombank is going to convene an extraordinary shareholders’ meeting in the upcoming time.

Tram Be, Sacombank’s former deputy chairman, was requested to resign before October 30, 2015. He will not participate in Sacombank’s governance after the merger.

An SBV representative reported to participate in Sacombank’s Board of Directors after the merger, will be present in the bank’s upcoming shareholders’ meeting.

There are also rumours that even Sacombank’s top leadership position might be subject to change.

With SBV’s strong commitment to facilitating the restructuring of the banking sector, experts assume that many more management changes will follow, helping to bolster their operation efficiency in the current highly competitive market.

In a recent talk with the VIR, former SBV Governor Cao Sy Kiem said that mergers and acquisitions (M&A) were an inevitable trend in the current business landscape. This will help banks grow stronger not only in technology, networking, and human resources, but also help upgrade their growth and governance models.

Therefore, not only weak banks merge with each other, big players also embrace M&A deals which will entail changes to their shareholder structure while helping curtail the crossholding situation in the banking sector.