Operations of a new entity combining Vietinbank and PGBank are expected to kick off in the second half of the year.
Shareholders in the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) have agreed to a merger with PGBank
“Vietinbank recognizes that PGBank is a potential financial institution to be looked at for a merger,” according to a document prepared for the Vietinbank 2015 annual general meeting.
In the meeting, Vietinbank proposed to shareholders a contract and plans for the partnership between the two banks which include issuing addition shares and a swap ratio of 1:0.9, which means one PGBank share will be equal to 0.9 Vietinbank shares. The merger will be completed in the third quarter.
The new bank will be keep the name of Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank). Vietinbank's board will stay the same while members of PGBank's board will be terminated, with Vietinbank now considering new candidates based on experience and ability.
Vietinbank said that all personnel of PGBank will be retained and guaranteed an average salary not less than their average from the last six months. However, payment will be adjusted according to a new salary system.
The new bank will have total charter capital of about VND40 trillion ($1.85 billion). PGBank has charter capital of VND3 trillion ($138.87 million). Total assets as of 2014 were VND25.8 trillion ($138.87 million), while profit before tax was VND168 billion ($7.77 million). A major strategic shareholder of PGbank, Petrolimex, holds 40 per cent of charter capital.
The new bank will open a financing company to serve particular customers of Petrolimex and gas stations as PG Bank did before. The company will be named VietinPG Finance, with a charter capital of VND1 trillion ($46.29 million).