|The State Bank of Viet Nam (SBV) approved Viet Nam Technological and Commercial Joint Stock Bank's (Techcombank) proposal to acquire Viet Nam Chemical Finance Joint Stock Company (VCFC).
HA NOI (VNS) — The State Bank of Viet Nam (SBV) approved Viet Nam Technological and Commercial Joint Stock Bank's (Techcombank) proposal to acquire Viet Nam Chemical Finance Joint Stock Company (VCFC).
The proposal, which was approved on Wednesday, is to turn the VCFC into a one-member limited liability company with 100 per cent charter capital owned by Techcombank.
Under Decision 1108/QD-NHNN, the central bank has allowed Techcombank to receive all the legitimate assets, rights, obligations, and benefits of the VCFC.
Techcombank and the VCFC shall follow procedures for a business type conversion, business registration, public notification, and other legal procedures under the provisions of laws.
On the same day, the SBV also issued Decision 1109/QD-NHNN on amending and supplementing some contents of the establishment and operation licence of the VCFC.
Accordingly, the new company's full name will be Technological and Commercial Finance Company Limited (TechcomFinance) and with a charter capital of VND600 billion (US$27.64 million), it will be 100 per cent owned by Techcombank.
Techcombank was one of the four founding shareholders of the VCFC, with contributed capital of VND60 billion ($2.76 million), equivalent to 10 per cent of the total capital. The other three founding shareholders were Vinachem with 37 per cent contributed capital; Ha Bac Nitrogenous Fertiliser and Chemical Limited Company with 2 per cent; and Bao Minh Insurance Corporation with 10 per cent.
As of January 9, 2015, Techcombank completed the receipt of more than 53.92 million shares, corresponding to 89.87 per cent of the VCFC's charter capital, increasing its ownership to 99.87 per cent.
Industry experts forecast that the wave of commercial bank and finance company mergers will become a major trend this year as mergers can help meet legal regulations and boost consumer lending.
According to an SBV circular, a bank will be allowed to possess stakes in maximum two credit institutions and the ownership must not be more than 5 per cent.
Many banks currently own several stakes in financial companies, and in many cases, their stakes surpass the 5 per cent benchmark.
According to another SBV's draft circular on the consumer credit activities of financial companies, which is expected to be approved soon, commercial banks will need to establish financial companies if they want to venture into consumer lending services. — VNS