HA NOI (Biz Hub) — The Maritime Bank (MSB) announced its plan to merge with the Mekong Development Bank (MDB) on its website on March 31.

The announcement came after State Bank of Viet Nam (SBV) Governor Nguyen Van Binh approved the merger earlier last month.

The new institution would be named Maritime Bank, and have a charter capital of VND11.75 trillion (US$560 million) and total assets of VND113 trillion ($5.38 billion).

MSB has 800 million shares circulating in the market, and MDB 375 million shares. Their stock is valued at VND10,000 (48 cents) each.

MSB will issue 375 million additional shares to carry out the merger, with every share of MDB converted into a share of MSB. All rights and interests, as well as responsibilities of existing shareholders of the banks will be retained.

The merger plan was approved at the two banks' shareholders meeting in 2013, with the aim to boost financial strength and competitiveness. The banks expected the merger would help them be counted among the largest banks nationwide in terms of charter capital and transaction network.

This is first merger this year since SBV officials stated that they expected about six bank merger and acquisition (M&A) deals to be implemented in 2015, as part of an effort to clean up the banking sector.

Credit ratings agency Moody's reportedly said recently that the growing number of M&A deals in the domestic banking sector was a positive sign that would help reduce systematic risks. They would also enable the authorities to better manage the area, and banks to extend loans and expand markets more advantangeously.

MSB has VND8 trillion ($380.95 million) in equity and more than VND107 trillion ($5.10 billion) in total assets, while MDB has VND3.75 trillion ($178.57 million) and nearly VND6.44 trillion ($306.67 million) respectively. — VNS