The central bank has approved the merger of Phuong Nam Bank and Sacombank. — Photo baomoi.com

HA NOI (Biz Hub) ─ The State Bank of Viet Nam (SBV) has approved in principle the merger of Phuong Nam Bank and Sacombank.

SBV Governor Nguyen Van Binh announced this as deputies asked him questions about the restructuring of banks, at a session of the National Assembly's Standing Committee on September 29.

The shareholder meetings of the two banks had cleared the merger earlier this year. Phuong Nam Bank, or Southern Bank, was among the fragile lenders that are being reorganised as required by SBV. However, the bank found it impossible to implement the restructuring on its own.

Sacombank said that the merger is necessary for it to remain competitive in the coming years, as the banking sector is seeing stiffer competition.

According to news website gafin.vn, Sacombank posted a profit of nearly VND650 billion (US$30.95 million) at the end of the second quarter this year. Its credit growth reached 9.61 per cent and deposit growth hit 12.63 per cent during the period.

Sacombank Vice Chairman Tram Be is a senior adviser of Phuong Nam Bank, where his family members hold a stake of more than 20 per cent.

The central bank has also approved the merger of the Mekong Development Bank and Maritime Bank, Binh said. ─ VNS