Sacombank (STB) is expected to become Vietnam’s 5th largest lender after the acquisition of Southernbank, and reaching a total assets of VND240trn ($11.4 bn), from VND160trn.
This takeover would place Sacombank in fifth position behind state-owned Agribank, BIDV, Vietcombank and Vietinbank.
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The Vietnamese banking system has been going through a shake-out since 2011 due to non-performing loans and cross-ownership. The central bank has ordered takeovers of the weaker banks and restructuring.
Southernbank’s bad debts increased by a quarter to VND1.32trn at the end of the third quarter last year. Nearly 60% of those debts were classified in the lowest category, a situation judged "unfeasible" to recover without help.
Sacombank management saw Southernbank as a good takeover possibility because of their operational synergies.
The two still need to get approval from their respective shareholders and obtain permission from the State Bank of Vietnam, announced Phan Huy Khang, Sacombank’s vice chairman.
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