18:35 (GMT +7) - Friday 22/01/2021

Banking & Finance

Vietinbank and BIDV bigger and better

Released at: 09:16, 23/05/2015

Vietinbank and BIDV bigger and better

Vietinbank merged with PGBank while Monday is the big day for BIDV and MHB.

by Nguyen Hoai

The official merger contract between Vietinbank and PGBank was signed yesterday evening and on Monday the merger contract between BIDV and MHB will also be signed. The two events have drawn attention due to their importance to the banking sector, with Vietinbank and BIDV becoming stronger after talking over the two smaller banks. 

Broader sales channels

Vietinbank will increase its scale and financial capacity to develop a platform and be large enough to compete regionally, its 2015 annual general meeting was told. Mr. Le Duc Tho, General Director of Vietinbank, told VET that Vietinbank’s merger with PGBank will open up more business activities. “Vietinbank will increase its total assets to around VND25 trillion ($1.14 billion), charter capital to VND3 trillion ($137.58 million), the highest in Vietnam, outstanding credit to VND15 trillion ($687.9 million), and mobilized capital to over VND18 trillion ($825.48 million),” he said.

It will also broaden its network after inheriting 16 bank office licenses and 63 transactions points from PGBank, and will extend its business to rural areas as well as 2,200 gas stations associated with Petrolimex and 4,000 others owned by Petrolimex.

Vietinbank also signed additional agreements with Petrolimex with a term of ten years to provide all banking and financial services through the Petrolimex network.

Regarding the merger between BIDV and MHB, the former paid it a great deal of attention in creating a “Committee for the Merger with MHB”. This committee said the post-merger BIDV would increase its total assets to VND46 trillion ($2.1 billion) and charter capital to VND3.4 trillion ($155.92 million). BIDV’s network will have new 240 transaction points and relationships with almost 300 banks in both the domestic market and the international market, in 50 countries.

In terms of retail banking, BIDV will also inherit MHB’s ATMs, which accept many different cards.

Mr. Tran Bac Ha, Chairman of BIDV, also said that post-merger it would strengthen its business activities into agriculture in the Mekong Delta, which was not previously a strength of the bank.

No easy task

Mr. Tho indicated that the merger between PGBank and Vietinbank was done with transparency and was in accordance with the market’s orientation and local laws but that Vietinbank remains aware of the obstacles ahead. First is the gap between staff quality and standardizing the entire operating system and organizational norms. Bringing IT systems into sync is also not a straightforward job, as Vietinbank is a leader in core banking while the IT system of PGBank is simple and has received minimal investment to date.

Risk management standards also need time to be brought to an equal level. “In order to handle this problem we will create a specialist committee that will work together for three to six months, and even hire consultants to support us during the transfer process,” Mr. Tho said.

BIDV, meanwhile, also has many departments to keep its operations running smoothly, especially today and tomorrow.

User comment (0)

Send comment