Shareholders vote for Sacombank – Phuong Nam merger

Wednesday, Mar 26, 2014 01:00

Over 97 per cent attendees at Sacombank's shareholder meeting on Tuesday voted for its merger with Phuong Nam Bank. — File Photo

HA NOI (Biz Hub) ― During the Sacombank's annual shareholder meeting, held in HCM City, on Tuesday, over 97 per cent attendees voted for its merger with Phuong Nam Bank.

This information was revealed by the news website 

Sacombank Chairman Kieu Huu Dung emphasised that such a merger will be necessary for the bank in order to remain competitive in the coming years, as the banking sector was seeing stiffer competition.

"After assessing both the advantages and disadvantages, we realise the need to merge with another bank to become stronger," he claimed, noting that fortifying scales and networks will be important for success, besides strengthening management capacity.

Sacombank stated earlier this month that both sides were spontaneous about the merger. Phuong Nam Bank, or Southern Bank, was among the fragile lenders that are being restructured as required by the State Bank of Viet Nam, but it found that it was impossible to do the restructuring on its own.

On Tuesday, some shareholders expressed concerns that a merger with a weaker bank might be a drawback for Sacombank in the future.

Dung remarked that the merger had only been approved in principle, and the Sacombank management board will have to build detailed plans, which will be submitted to the central bank and shareholders for further consideration. These procedures will be implemented in this year, he notified.

In 2013, the growth of total assets, deposits, and outstanding loans at Sacombank failed to match expectations. The bank is yet to find strategic foreign investors, although it had been planning to sell a 20 per cent stake to strategic partners for the past two years.

"Taking in consideration the general tough situation of the financial market, and as we are waiting for the Government to increase the equity offering for strategic foreign investors, we haven't been able to complete this task yet," he stressed.

This year, Sacombank plans to achieve a total asset value of VND183 trillion (US$8.71 billion), up 14 per cent over last year. Deposits are expected to reach VND160.5 trillion (US$7.64 billion) and outstanding loans VND124.6 trillion (US$5.93 billion), both growing 14 per cent year-on-year.

The bank expects to earn VND3 trillion (US$142.86 million) in pre-tax profits and pay dividend at 10-12 per cent in 2014. ― VNS

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