|A customer performing a transaction at a Vietinbank branch in Hà Nội. — Photo cafef.vn|
HÀ NỘI — The Việt Nam Bank for Industry and Trade (VietinBank) and the Petrolimex Group Commercial Joint Stock Bank (PG Bank) have called off a potential merger after nearly two years of negotiations.
The information was announced by Vietinbank, one of Việt
PG Bank is a subsidiary of Việt
As stated in Vietinbank’s financial statement, VietinBank and PG Bank will report to the competent authorities of each party for approval to terminate their merger plan. They will also organise a shareholder meeting to discuss a restructuring plan on April 21.
The cancellation followed a request by the State Bank of Việt Nam (SBV), which is Vietinbank’s largest shareholder, controlling 64.46 per cent of the bank. SBV insisted that VietinBank review and assess PG Bank stock valuation results, calculating and renegotiating the stock swap ratio agreed by the two sides earlier.
This dashes investors’ hopes for a long-term strategic cooperation between the new bank and large corporations in the energy sector which would be boosted significantly by an expansion of capital, networks, and customer base.
PG Bank got the approval from its shareholders for the merger with Vietinbank on April 14, 2015, in accordance with the overall plan of SBV on the banking sector restructuring process regarding the handling of weak lenders.
On May 22, 2015 in Hà Nội, Vietinbank signed the M&A deal with PG Bank, and a comprehensive co-operation agreement with Petrolimex.
If the merger was approved by SBV, the new financial institution would continue to be named VietinBank, and would become the largest and 2nd largest bank by registered capital and assets in Việt Nam with VNĐ40 trillion (US$1.85 billion) and VNĐ686.9 trillion, respectively.
VietinBank shareholders also agreed on the swap ratio of 1:0.9, or one PG Bank share will be exchanged for 0.9 Vietinbank share and the Hà Nội-based bank will issue more shares for conversion with PG Bank shares.
According to Chairman of Vietinbank Nguyễn Văn Thắng, the merger, if approved, would have helped the Vietinbank boost capital, develop expanded branches, and foster retail services, in addition to stepping up lending and investment.
It would also open up new opportunities for VietinBank and Petrolimex to head strategic cooperation, which would benefited shareholders, customers, and the state, Thắng told participants at the signing ceremony of the M&A deal held in May 2015.
Following the merger, Vietinbank could enlarge its network with the help of PGBank’s 16 branches and 63 offices nationwide.
As PG Bank was a strategic partner of Petrolimex, Vietinbank would also capitalise on PG Bank’s significant competitive advantages, based on its network of 6,200 filling stations across the country, to enlarge its network to communes, Thắng said.
However, the move was not finalised as the SBV did not officially approve the merge.
VietinBank is 64.5 per cent owned by SBV, while
PG Bank, formerly known as Đồng Tháp Mười Joint Stock Commercial Bank, had a chartered capital of VND3 trillion (US$138 million) and total assets of about VND25.78 trillion (US$1.19 billion) as of the end of last year.
Việt Nam News contacted Vietinbank for further information but the bank was unable to provide any immediate comment at the time of going to print. — VNS