Phan Huy Khang (L), general director of Sacombank, and Truong Van Phuoc, general director of Eximbank, shake hands after signing the agreement in HCMC on Tuesday - Photo: Courtesy of Sacombank
Vietnam Export Import Commercial Bank (Eximbank) and Saigon Thuong Tin Commercial Bank (Sacombank) on Tuesday clinched a deal on a long-talked-about merger that would be complete in the next 3-5 years.
The merger is aimed at making use of the two sides’ strengths, increasing market share, and improving competitiveness and business efficiency. The agreement is valid for five years.
Eximbank is currently a large shareholder in Sacombank, holding a stake of 9.73%. Given the current economic difficulties at home and abroad, cooperation is seen as a lifeline for Eximbank and Sacombank to cope with their difficulties.
The two banks will join hands to give loans under the form of co-financing or providing entrusted loans and granting each other credit limits in the inter-bank market to optimize capital sources and timely assist each other in liquidity. Credit limits, terms and interest rates will be applied in accordance with the policies and the actual conditions of each party in each period.
They will also support each other in gold and foreign currency trading in order to meet the demand of clients and monitor the foreign exchange holding status of each other under the regulations of the central bank.
Moreover, Sacombank and Eximbank will share experience in human resource management and training, risk management, information technology and restructuring under international standards and practices.
Pham Huu Phu, chairman of Sacombank, said: “As the local and global economies are forecast to continue to face multiple challenges in 2013 and the following years, I believe that with mutual trust and understanding and forecasts of a better future, Sacombank and Eximbank will quickly achieve good results from this cooperation.”
At the annual shareholders meeting of Sacombank in 2011, Le Hung Dung, chairman of Eximbank, revealed the intention to merge his bank with another bank.
Eximbank had had total chartered capital of some VND12.3 trillion and total assets of over VND160 trillion by the end of the third quarter of 2012. Meanwhile, the respective figures of Sacombank were VND10.7 trillion and more than VND147 trillion.
In response to a media question as to whether there is cross ownership between the two banks, Dung said that apart from the stake officially held by Eximbank, no major shareholders in Sacombank are related to Eximbank.
As planned, chartered capital of Eximbank and Sacombank will reach VND30 trillion this year, with a network of over 650 transaction points nationwide. If the merger took place in the next 3-5 years, the two institutions’ capital, assets and operation networks would be much bigger.
The two would hire an international firm to give them advice on the merger. Then, a specific plan will be made and put forward to the boards of directors and shareholders of the two banks at shareholders meetings. The plan must be approved by 65% of the shareholders present at the meetings.
The Saigon Times Daily
