Vietnamese banks to decrease from 39 to 15 by 2017

Find out what will cause the drop.

Finance information service firm StoxPlus believes the number of Vietnamese banks could decrease from 39 to 13 or 15 by 2017. Its merger and acquisition (M&A) survey showed most of the M&A deals in the banking sector in 2013 will be the investment deals on minority shares to be made by foreign finance groups unlike in previous years.

StoxPlus said that of the 39 commercial banks, 15 have found strategic partners from the banking sector. In 2012, the domestic M&A market witnessed a considerable decline over 2011.

A report showed that 157 deals were concluded with the total value of US$4.9 billion in the year. The figure was 267 deals and US$6.3 billion in 2011.

In 2012, the M&A market witnessed two big hostile takeover deals involving Sacombank, one of the biggest commercial banks in Vietnam, and Phuong Nam Bank.

Other big deals saw the Thien Thanh Group bought Trust Bank and BTMU buy stakes of the equitized Vietinbank. And early this year, PetroVietnam Finance Corporation announced plans to merge with West Bank.

Media reports said Dai A intends to merge with HD Bank. Le Thi Bang Tam, Chair of HD Bank, confirmed the information at the shareholder’s meeting of the bank last April.

M&A deals in the banking sector are attracting much attention from the public, partially because 9 of the 39 commercial banks are under the special control of the State Bank of Vietnam, the central bank. The banks have overly large bad debts and massive liquidity problems.

StoxPlus is one of Vietnam’s sources of financial information, interactive market data and investing tools for securities companies, investment management firms, professionals and private investors.