VietNamNet Bridge – The number of Vietnamese commercial banks would decrease from 39 currently to 13-15 by 2017, according to Stoxplus, a finance information service firm.

The 2013 merger and acquisition (M&A) released of the firm showed that unlike the previous years, most of the M&A deals in the banking sector in 2013 would be the investment deals on the minority shares to be made by foreign finance groups.

In 2012 alone, the M&A market witnessed two biggest hostile takeover deals in the history relating to Sacombank, one of the biggest commercial banks in Vietnam and the Phuong Nam Bank, two domestic strategic investment deals (DOJI poured money into Tien Phong Bank and Viettel into Military Bank).

There were also other big deals, in which Thien Thanh Group bought Trust Bank and BTMU bought the stakes of the equitized Vietinbank.

In early 2013, PetroVietnam Finance Corporation (PVFC) announced the plan to merge the West Bank into it.

In early March 2013, the government okayed the SCB’s plan to sell stakes to foreign investors.

Local newspapers have reported that Dai A is going to merge into HD Bank.

Le Thi Bang Tam, Chair of HD Bank, confirmed the information at the shareholder’s meeting of the bank on April 26, though the documents delivered to the shareholders at the meeting did not mention the merger plan.

If the deal succeeds, this would be a merger deal on the voluntary basis, not a compulsory merger instructed by the central bank.

Tam also said that the merger plan got the nod from the State Bank of Vietnam.

HD Bank also considers buying a consumer finance company to implement its plan to jump into the consumer finance market.

CafeF has reported that the Military Bank is also seeking some partners to merge them into it. Four or five banks have expressed their willingness to merge into Military Bank, but no final decision has been made so far.

The M&A deals in the banking sector have been attracting the special attention from the public, partially because 9 of the 39 commercial banks have been put under the State Bank’s special control. The banks reportedly have overly big bad debts, big problems with their liquidity.

To date, 6 of the 9 banks have successfully restructured themselves as requested by the State Bank. They include De Nhat, Tin Nghia and Saigon which merged into one bank one year ago, Habubank, which has merged into SHB, Tien Phong Bank which has restructured itself, and the Western Bank which is going to merge into PVFC.

In the latest news, the government may allow to raise the foreign ownership ratio in a commercial bank to over 30 percent. SCB is an example, and more similar cases are expected to be seen in the future.

Analysts believe that the small banks which have certain advantages in the consumer credit, card services would be the “aiming points” of the foreign finance institutions from Japan, Australia and Canada which still have not made their presence in Vietnam yet.

The report of StoxPlus showed that of the 39 Vietnamese operational commercial banks, 15 have found the strategic partners from the same sector.

In 2012, the domestic M&A market witnessed a considerable decline over 2011. A report showed that 157 deals were wrapped up with the total value of $4.9 billion in the year. The figures were 267 deals and $6.3 billion in 2011.

Compiled by C. V