The Mekong Housing Bank (MHB) will collaborate with the Bank for Investment and Development of Viet Nam (BIDV) to complete their merger this year. — Illustrative image/Photo baodautu

HCM CITY (Biz Hub) — The Mekong Housing Bank (MHB) will collaborate with the Bank for Investment and Development of Viet Nam (BIDV) to complete their merger this year.

MHB Chairman Huynh Nam Dung revealed the decision to the local press, adding that this was in line with a directive of the State Bank of Viet Nam (SBV).

The announcement spiked market speculations about the State-run BIDV reportedly announcing that it would possibly merge with a bank in the southern part of the country.

Documents from the MHB shareholders meeting, which the bank posted on its website on April 2, stated that both banks had joined hands to formulate the plan since the fourth quarter last year.

MHB and BIDV both plan to hold their shareholders meeting in HCM City on April 17, while the housing bank said it had completed a restructuring scheme to be presented to SBV.

MHB's management board confirmed in the documents that the bank had shown sustained and healthy development, despite its small scale.

Last year, the bank's total assets grew 17.4 per cent year-on-year to about VND45 trillion (US$2.14 billion), and deposits increased by 14.4 per cent to more than VND37 trillion ($1.76 billion).

Its outstanding loans expanded 13.8 per cent to VND30.60 trillion ($1.46 billion) in 2014, and the bad debt ratio was 2.72 per cent at the end of the year.

Pre-tax profits earned were pegged at VND162 billion ($7.71 million), reflecting a year-on-year increase of 14 per cent, while the return on equity ratio (ROE) reached 3.7 per cent, and the capital adequacy ratio (CAR) hit 16.95 per cent.

MHB had successfully auctioned its shares during an initial public offering in July 2011, but hasn't yet listed its shares on the stock market.

The deal between MHB and BIDV was among six mergers and acquisitions that SBV officials expect to be completed this year as part of a general effort to clean up the banking system.

On March 31, the Maritime Bank officially announced that it would merge with the Mekong Development Bank, marking the first banking merger in 2015. — VNS