Big M&A deals forecast for Vietnam banking industry

HANOI: Vietnam’s mergers and acquisitions (M&A) market in 2022 is forecast to include big deals worth billions of dollars in the banking industry.

One of them is related to the Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank). Vietcombank will carry out a private placement of 6.5% of its capital. If successful, the deal will help the bank gain some 30 trillion dong (RM5.71bil), tinnhanhchungkhoan.vn reported.

Vietcombank is also expected to participate in restructuring a weak bank in the form of mandatory transfer.

Another notable deal is that Military Commercial Joint Stock Bank (MB) has submitted to its shareholders a plan to receive a mandatory transfer of OceanBank.

MB vice-chairman Luu Trung Thai said the cooperation with OceanBank is both a political task and an opportunity for MB to expand its operational scale. MB will coordinate with OceanBank to check their data system before developing a plan to submit to the government.

OceanBank’s representatives have so far announced one of the bank’s key tasks in 2022 is to coordinate with MB in carrying out a syndicated loan programme, including retail lending, and develop a number of competitive products to attract customers and increase the bank’s brand name in the credit market.

According to analysts, in the first phase, with large liquidity support from the central bank, MB may not need to immediately pour capital into OceanBank, but it will support OceanBank through sending its senior management personnel to work with them.

With the mandatory transfer of OceanBank, MB will enjoy a number of benefits, including a higher credit growth quota. Therefore, this is a win-win deal for both MB and OceanBank.

Besides Vietcombank and MB, some other banks have been assigned by the government to study plans to support weak banks, including DongABank, CBBank and GPBank.

According to a PricewaterhouseCoopers report on global M&A trends in 2022, despite the market’s uncertainty, Vietnam’s merger and acquisitions activities are expected to continue to grow strongly, due to an abundance of capital source and higher demand.

In particular, the M&A deals in the banking industry are predicted to boom, with the participation of foreign financial organisations.

Economist Vo Trí Thanh said despite the impact of Covid-19, the success of many M&A deals in the banking industry proved that foreign investors highly appreciated the growth potential of Vietnam’s economy and the banking industry.

If the M&A of finance companies were the spotlight of the market in 2021, this year should see many M&A deals of bank share sales to foreign partners, Thanh predicted.

For example, said Thanh, the Joint Stock Commercial Bank for Investment and Development of Vietnam has so far planned to carry out a private placement of 8.5% of its shares in 2022.

Similarly, Ocean Commercial Bank is preparing to sell 10% of capital to foreign partners while, Saigon Hanoi Commercial Joint Stock Bank has also temporarily locked the foreign ownership rate at 10% to find a strategic partner. — Viet Nam News/ANN