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Banking & Finance

BIDV - MHB merger details announced

Released at: 17:20, 16/04/2015

BIDV - MHB merger details announced

Additional information released by BIDV Chairman.

by Hung Nguyen

An announcement on the merger between the Bank for Investment and Development of Vietnam (BIDV) and the Mekong Development Joint Stock Commercial Bank (MHB) was made on April 14 by Mr. Tran Bac Ha, Chairman of BIDV.

BIDV has charter capital nine times higher and total assets 15 times higher than the MHB, he said, and the stock price of BIDV is significantly higher than MHB’s but the stock swap ratio is set at only 1:1.

Post merger the new bank will have charter capital of VND31.51 trillion ($1.45 billion), with VND28.11 trillion ($1.30 billion) coming from BIDV and VND3.4 trillion ($157.42 million) from MHB.

Total assets will stand at VND695 trillion, with MHB contributing VND45 trillion ($2.08 billion).

Both banks are majority owned by the State (over 90 per cent), Mr. Ha said, so the merger is simply a case of shifting State capital.

BIDV holds advantages in major cities and industrial zones while MHB has experience in agriculture in the Mekong Delta. “The merger will help strengthen the capacity of BIDV in the agriculture market,” Mr. Ha acknowledged.

BIC seeks foreign investor

Another recent move involving BIDV relates to the Bank for Investment and Development of Vietnam Insurance Joint Stock Corporation (BIC), which will issue a maximum of 41 million additional shares to foreign strategic shareholders. On March 15 Mr. Pham Quang Tung, Chairman of BIC, told the media that the Board of Management will propose a plan to issue the additional stock to strategic shareholders, equal to 35 per cent of its charter capital. The additional stock is expected to add VND1 trillion ($46.30 million) to its charter capital.

BIC has set a foreign ownership limit of 35 per cent because if BIDV holds less than 51 per cent it will lose its decision making power.

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