Merger and acquisition (M&A) banks: Many billion-dollar deals are quietly negotiated

Tens of trillion dong is expected to be poured into foreign banks by Vietnamese investors in the period of 2019-2020. The negotiation for many deals is going smoothly.

Foreigners crowded “aimed” at the big stock

After successfully selling 3% of capital to foreign investors, earning VND 6,200 billion at the end of last year, Vietcombank is continuing to promote the plan of selling 6.5% of shares from now to 2020. Mr. Vo Viet Hung , Head of Vietcombank’s Capital Increase Department said that the 6.5% stake sale roadmap was approved by the Bank and is waiting for the approval of the State Bank as well as the related ministries and branches.

According to the report of the Vietnam Investment Review, many foreign investors are looking for opportunities to pour capital into the bank with the largest profit in Vietnam. Especially, GIC – the investment fund of Singapore Government – after pouring capital to buy 2.55% of Vietcombank capital at the end of last year, still wants to participate in the next offering. “The current offering is relatively favorable because many foreign investors are interested.”, Mr. Hung excitedly said.

BIDV is in the negotiation phase of selling capital to foreign partners.

Another big bank, BIDV is also in the negotiation phase of selling capital to foreign partners, namely Keb Hana of Korea. However, the offering was not very smooth, the main reason was due to the procedure and price. Phan Duc Tu, Chairman of BIDV’s Board of Directors, said that the procedures have been basically removed, but the two sides have not yet agreed on the price. Most likely, this deal cannot be “closed” in 2019. If successful, this will be one of the most valuable deals on the market.

The bank is weak “Expensive”

At the meeting with Prime Minister Nguyen Xuan Phuc during the recent G20 Conference, Mr. Nobiru Adachi, Chairman of J.Trust Bank, said that the Bank has studied and carefully calculated the Bank’s financial indicators. Construction (CBBank) and sent the offer to buy back for restructuring this bank to the State Bank of Vietnam. “We believe that, in a short time, CBBank will be reformed, bringing the bank back to its previous position,” said Mr. Nobiru Adachi.

Many positive factors

The State’s reduction of ownership in banks will create more room for foreign investors. The stock market is growing well. Administrative procedures in the process of approving equitization, corporate valuation are also improving … All these factors will make M&A activities more active in the coming time.

TS Can Van Luc, Economic Specialist

Not only J. Trust, according to the National Financial Supervisory Commission, recently, many foreign investors such as Srisawad Corporation (Thailand), Clermont Group (Singapore) … expressed their desire to be acquired and participated in restructuring Vietnam’s weak banks and credit institutions.

Previously, the State Bank said that it had completed and submitted to the Prime Minister the plan to transfer and restructure OceanBank after reselling to foreign investors. The name of this investor is not disclosed by the State Bank.

According to financial experts, there are many factors that make weak banks “expensive” in the coming time. It is Vietnam’s economy growing well, the financial ratios of these banks are getting better. In addition, the Government has announced that it will not grant licenses to establish new foreign-owned banks by the end of 2020 to focus on resolving the weak domestic banks and actively connecting with foreign investors.

M&A will “bloom” from 2020

After the boom period, the banking M&A in the last few years was very quiet. The most successful deal is Vietcombank sold 3% of its capital to foreign partners. Meanwhile, the much expected deal of PGBank – HDBank has not yet become a reality.

Explaining the reasons for M&A in the bank, TS. Can Van Luc, an economist, said that partly because the stock market has not developed sustainably, there are still many risks, partly because the process of approving foreign strategic shareholders is still complicated and requires a lot of time. space.

However, the good news is, there are many signs that the market is getting warm again. In addition to the weak banks or the aforementioned big companies, many other joint stock banks are also in the process of finding foreign partners, such as SHB, NCB, OCB …

TS-LS. Bui Quang Tin – CEO of BizLight Business School said that the pressure to comply with Basel II capital standards from now to 2020 will put many banks before the M&A problem. Not to mention, according to the Vietnam Banking Sector Development Strategy to 2025, with a vision to 2030, the State will reduce the ownership ratio at state-owned banks. This makes M&A of the bank continue to be active.

According to financial experts, the M&A picture in the banking sector in the coming time will be very diverse, not only for mergers and acquisitions, but also “to export” to sell capital, such as the form of international bond issuance that TPBank. and VPBank are planning. Of course, in order to successfully raise capital on the international exchange, first of all, banks must be highly rated by reputable organizations.

Hà Tâm
* Source: Electronic Investment Newspaper


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