VietinBank-PG Bank Merger still Awaits Central Bank Nod

The Vietnamese central bank has yet to approve a merger between VietinBank and PG Bank.

The State Bank of Vietnam (SBV), the country’s central bank, has yet to give final approval to the merger of smaller Petrolimex Group Commercial JS Bank (PG Bank) into Bank of Industry and Trade of Vietnam (VietinBank) as the regulator takes cautious steps in its ongoing bank revamp.

VietinBank’s shareholders approved a plan to take over PG Bank at an annual general meeting (AGM) in 2015, under which each share of PG Bank would be swapped for 0.9 share of VietinBank. The fusion was scheduled for completion in mid-2015.

As the process takes more time than expect, the SBV has requested the two banks to update their data, including conducting an audit into PG Bank, VietinBank Chairman Nguyen Van Thang told BizLIVE on the sidelines of the lenders’ AGM on April 17.

“The two banks are renegotiating the swap ratio, which is the largest hurdle now. Once the two sides come to an agreement on the ratio, we will ask for SBV permission to complete the deal,” Thang tipped.

The SBV has not set a time-frame for the merger, but both VietinBank and PG Bank want to finalize it as soon as possible, he added.

VietinBank has a registered capital of 37.23 trillion dong ($1.64 billion), in which the SBV takes a 64.5% stake while The Bank of Tokyo-Mitsubishi UFJ owns 19.73% and IFC 8%, according to Cafef.vn.

Meanwhile, PG Bank’s capital base remains unchanged at three trillion dong ($132 million) for years. Fuel trader Petrolimex owns a 40% stake in the bank.

In the first quarter of this year, VietinBank earned a pre-tax profit of 2.49 trillion dong ($109.6 million), up 3.4% year-on-year. Its total assets increased 4% from end-2016 to 986.5 trillion dong ($43.46 billion).

Tuan Minh / BizLIVE