HA NOI (VNS)— Vietinbank was not mentioned in the new merger proposal submitted by the Management Board of Petrolimex's PGBank at PGBank's shareholder meeting held yesterday.
The document only mentioned the merger with another bank as part of its restructuring process, with no reference to Vietinbank or any other banks, although the previous proposal said that 99 per cent of PGBank's stake would be sold to Vietinbank, to become a banking unit under the nation's second largest bank by assets.
If the merger of PGBank with another bank is passed, the ownership of Petrolimex, the national petroleum group at PGBank, would be reduced to 20 per cent, from its current 40 per cent.
According to PGBank, the merger and acquisition was PGBank's effort to restructure, in a bid to create a healthy banking system. A merger with Vietinbank was just one choice, among many options.
At its shareholder meeting yesterday, with the participation of 38 stakeholders who represented the ownership of 93.24 per cent of the voting shares, PGBank also sought to achieve a pre-tax profit of VND250 billion (US$11.9 million) this year, four times higher than last year, through resolving bad debts.
With a high bad debt ratio, at 2.98 per cent as of the end of last year, resolving bad debt is seen as a real challenge to the management board.
A large level of bad debt, coupled with the Government's interest rate cuts, had impacted the bank's profits last year, according to chairman of the Management Board, Bui Ngoc Bao. PGBank reported pre-tax profits of nearly VND52 billion ($2.4 million) last year, while only meeting 13 per cent of its goal and being 9 per cent lower than in 2012.
The bank also planned to pay dividends at a ratio of 1 per cent of its charter capital.
A proposal to offer PGBank's shares to be traded on exchanges also passed at the shareholder meeting yesterday. – VNS