Vietnam Daily News

Vietnam Bank M&A Offers Huge Opportunity for Foreign Banks

Written by Dailynews.vn Saturday, 10 December 2011 19:16

Merger and acquisition (M&A) activity among commercial banks in Vietnam is expected to "boom" from now until 2015, which presents an opportunity for foreign banks to increase their market shares in Vietnam, the local online newspaper Dau Tu reported.

Earlier, Governor of the State Bank of Vietnam (SBV), Nguyen Van Binh said at the Consultative Group (CG)'s annual meeting that the SBV was developing a detailed plan to reduce weak banks at minimum costs, which showed the central bank's preference for bank M&A.

Experts anticipated that after the merger of TinNghia Bank, SCB and Ficombank, M&A activities in the banking sector will be extremely active until 2015, which creates an opportunity not only for local lenders, but also for foreign banks.

Bank M&A was a good approach to restructure the local banking system and avoid collapse, said Sumit Dutta, CEO of HSBC Vietnam, adding that the central bank should give foreign banks more chances to participate in banking sector restructuring process in Vietnam.

Alan Cany, Chair of European Chamber of Commerce (Eurocham) said that many European banks expressed their interest in purchasing stake in Vietnam's banks. "Due to unfavourable conditions in Europe, many banks in Germany, Switzerland or France are seeking for investment opportunities in emerging markets. I believe that the current debt crisis in Europe, to some extent, will be the opportunity for Vietnam's economy in general and the country's banking sector in particular" said Alan Cany.

Louis Taylor, CEO of Standard Chartered Vietnam at Vietnam Business Forum (VBF) once again proposed to increase the foreign ownership ratio at local banks from the current 15 percent.

Source: www.intellasia.net/news/articles/finance/111350323.shtml