Mr. Nguyen Van Thang, Chairman of VietinBank, spoke with VET about its merger with PGBank.
■ As VietinBank is listed, how will the merger with PGBank affect its shares?
In merging with PGBank, VietinBank will issue additional shares that will not influence its existing shares. There will be no pause in share transactions as we await the official merger date.
Having signed a merger contract on May 22 VietinBank will now seek in-principle approval from the State Bank of Vietnam (SBV), while also registering with the State Securities Commission to issue the additional stock and then conducting a swap stock between ourselves and PGBank.
Our merger provides an example in conducting Master Plan 254 and the Banking Sector Reform Resolution issued by the government and the SBV.
■ Can you explain why the swap ratio between the two banks is one PGBank share to 0.9 VietinBank shares?
The ratio is based on the pricing model Deloitte suggested, in its role as consultant. It will be conducted in accordance with all procedures and existing laws. When calculating the swap ratio we measured all the components and determined how PGBank could benefit VietinBank post merger.
■ How did shareholders react to the swap ratio?
All shareholders at both banks have agreed with the swap ratio and there were no complaints.
■ Can you tell us about plans to handle PGBank’s non-performing loans (NPLs)? At what level will VietinBank’s NPLs be post merger?
PGBank’s NPLs are quite small and the Board of Directors at VietinBank has a specific plan on handling them. Due to their small volume they will have no negative impact on VietinBank’s NPL position.
■ How have cash flows at the two banks been affected since the merger was announced?
We worked on the principle of securing the positions of all depositors, staff and shareholders at both banks. We have a responsibility to secure and protect PGBank’s depositors in accordance with the law. Over the last few months PGBank’s transactions have remained normal, with no signs of anything out of ordinary happening.
■ Many people have said that the organization cultures at the two banks will be the most difficult issue to overcome in the merger. What do think about such views?
There are almost 2,000 employees at PGBank, so the matter of integrating them into VietinBank’s organizational culture is no simple task. Therefore, from now on, the Merger Committee will determine the thinking and expectations of PGBank staff, to assign them to suitable positions. We are also planning for PGBank’s small offices to switch to retail banking, so we can avoid any conflict in operating in the same field. If PGBank’s larger offices can’t be switched to retail banking they will remain as they are.
I’m certain the official merger will be completed as planned in the third quarter.
■ How will VietinBank explore the insurance sector after merging with PGBank and signing a contract a Petrolimex with a ten-year term?
Besides making use of the advantages from this deal in developing retail banking services via 2,200 gas stations associated with Petrolimex and 4,000 if its own gas stations, VietinBank will expand its domestic customer base by accessing the base of some member companies of the Petrolimex Insurance Company, such as PJICO, which is currently ranked fourth in the domestic life insurance market.
We will also cross-sell the insurance products of Bao Ngan and VietinAviva and the financial leasing products of the Financial Leasing Company of VietinBank will also be strengthened by integrating with the services at Petrolimex gas stations.