The Hanoitimes - The State Bank of Vietnam (SBV)`s approval is a major step creating necessary legal framework for the merger of two banks, which is scheduled to be completed by the end of 2018.
The SBV has approved the merger between Petrolimex Group Bank (PGBank) and Ho Chi Minh Development Bank (HDBank), VnExpress reported.
HDBank and PGBank will be responsible for disclosing information regarding the merger and complying with the law. Within two months, HDBank is expected to submit to the SBV merger proposal for approval.
In April, shareholders of the two banks approved the merger plan, of which the estimated swap ratio of PGBank and HDBank shares is identified at 1:0.621, indicating one share of PG Bank will be converted into 0.621 shares of HDBank.
At the close on September 10, HDBank's shares traded at VND37,000 (US$1.59) apiece.
Vietnam National Petroleum Group (Petrolimex) is the largest shareholder of PGBank, holding 40% of the bank's charter capital or 120 million shares.
The SBV's approval is a major step creating necessary legal framework for the merger of two banks, which is scheduled to be completed by the end of 2018.
The deal will raise HDBank's charter capital to VND15.345 trillion ($676 million) and increase the number of its branches ad transaction offices to 370 and financial transaction units to 15,000, effectively covering the nation's 63 cities and provinces.
The strategic cooperation among shareholders will improve the existing customer ecosystem of HDBank when it is able to get access to an additional number of more than 20 million individual customers, nearly 2,500 petrol stations and about 4,000 agencies of Petrolimex.
HDBank sets target for the total assets in 2018 of VND267.256 trillion (US$11.8 billion), total outstanding loans VND170.641 trillion (US$7.5 billion), while pre-tax profit would increase to VND4.712 trillion (US$207.6 million).