SBV gives go ahead to merger and grants permission for the establishment of a consumer credit subsidiary.
The State Bank of Vietnam recently issued Document No. 9191/NHNN-TTGSNH on the proposal for a merger of the Song Da Finance Company (SDFC) and the Military Bank (MB) and the establishment of a subsidiary in the consumer credit sector.
MB and SDFC are required to complete documents on the merger, consolidation, and acquisition of credit institutions for submission to the SBV for approval. The SBV also approved the establishment of a financial subsidiary in the field of consumer credit. MB is responsible for preparing subsequent procedures for submission to the SBV for approval.
MB held an extraordinary shareholders meeting on October 6 on the merger with SDFC, which his being conducted as part of restructuring policy of the government and aims to support the divestments of SDFC’s State shareholding from non-core business lines and help MB expand in financial markets.
The ratio between SDFC and MB shares is currently 2.2:1. The consumer finance provider being established, MB Finance Co. Ltd. (MB Finance), will have charter capital of VND500 billion ($22.2 million).
In the first two years MB Finance will be equipped with facilities, personnel, and a distribution network to enter the consumer finance market. It will expand its market share and operations and diversify its products and customers from the third year.