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Vietinbank, PG Bank to merge in Q3

Update: April, 15/2015 - 09:24
Vietinbank announces a plan to merge with PGBank on April 14. — Photo

HA NOI (VNS) — The Viet Nam Bank for Industry and Trade (Vietinbank) will merge with Petrolimex Group Commercial Joint Stock Bank (PG Bank) in the third quarter of this year, said Nguyen Van Thang, Chairman of Vietinbank's Board of Directors, at the bank's Annual Shareholders' Meeting yesterday.

PG Bank is currently a subsidiary of Vietnam National Petroleum Group (Petrolimex).

"Vietinbank has actively searched for credit institutions suitable to its development strategies. We have found that PGBank is a promising institution to merge with us," he said.

Thang said his organisation planned to become a banking and finance group with a strong position in the domestic banking system. It was also set for gradual expansion in international markets.

Thang said the merger would help Vietinbank increase its capital, develop and expand branches, foster retail services and step up its lending and investments. The move was expected to foster further co-operation between Vietinbank and Petrolimex's other subsidiaries.

The move would be finalised after the State Bank of Viet Nam officially approves the merge in the third quarter, he added.

He said that Vietinbank would also register with the Central Securities Committee to issue new shares, establish a new financial firm to complete the merge and publish information in the third quarter.

He said that Vietinbank would set up a financial company named PG Finance that will have a chartered capital of VND1 trillion and offer services to Petrolimex's customers after the merge.

Through PG Finance, Vietinbank hopes to benefit from Petrolimex's diverse business network that includes 6,600 gas stations and various Petrolimex customers in need of financial and monetary services.

Thang said that PG Bank's Board of Supervisors and Board of Directors would resign from their current positions after the move. Vietinbank promised to then arrange suitable positions for the senior officials.

The change rate for PG Bank shares to Vietinbank shares is 1:0.9, which means Vietinbank will exchange 270 million of its shares for 300 million of PG Bank shares, he added.

He said that Vietinbank would employ all PG Bank's employees after the merge and ensure that they receive the same incomes and benefits in the coming six months before the merge.

PGBank had a charter capital of VND3 trillion (US$142.86 million) and a total asset value of about VND25.78 trillion ($1.23 billion). — File Photo

Vietinbank would evaluate PG Bank's employees' salaries and adjust them to be in accordance with Vietinbank's regulations six months after the merge, Thang said.

The merge will increase Vietinbank's total assets by VND25 trillion (US$1.19 billion) to VND685 trillion ($31.7 billion) and its chartered capital by VND3 trillion ($142.86 million) to more than VND40 trillion ($1.85 billion).

In PGBank's annual report for 2014, their charter capital was VND3 trillion ($142.86 million) and total asset values amounted to VND25.78 trillion ($1.23 billion). Its outstanding loans reached VND14.50 trillion ($690.48 million) and pre-tax profits hit VND168 billion ($8 million).

Vietinbank had VND661 trillion ($31.48 billion) in total assets and roughly VND37 trillion ($1.76 billion) at the end of last year.

In 2014, its pre-tax profits hit about VND7.3 trillion ($347.62 million), down 5.8 per cent over the previous year. Outstanding loans grew 18 per cent year-on-year to reach VND542.68 trillion ($25.84 billion).

For 2015, the Vietinbank projects deposit growth of 14 per cent and loan growth of 13 per cent, and will maintain a bad debt ratio below three per cent. — VNS

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