Group II banks are looking to address capital issues by sourcing business expansion partners.
Orient Commercial Bank (OCB) wanted to team up with a suitable partner for mutual development through business cooperation or merger contracts and several partners had stepped up, said general director Trinh Van Tuan.
But, Tuan said with the bank’s current capacity and scope finding a suitable partner was not simple.
“Mergers will bring multiple growth opportunities. We want to shake hands with banks whose scope, capacity and development strategy conform with our bank,” Tuan asserted, adding that these prospective partners must be banks of group III and beyond.
Tuan said a merger would not kill the bank’s trademark and mutual development was possible.
DongA Bank’s general director Tran Phuong Binh assumed mergers could help boost relevant parties’ capacity through leveraging on each other’s strength in products, services, customer base and transaction network.
Besides these benefits, mergers would help parties save investment and operation costs as well as the needed time for network expansion.
Binh said DongA Bank was weighing up mergers with several partners.
In Kien Long Bank’s case, according to the bank’s 2012 general shareholder meeting documents the Board of Directors wanted the shareholders to grant it authority to come up with the bank’s merger plan and when the opportunity arrived.
OCB, DongA Bank and Kien Long Bank are group II banks pursuant to central bank’s 2012 credit growth target allocations. OCB’s current chartered capital stays at VND3,250 billion ($154.7 million) and the bank set to hike the figure to VND4,000 billion ($190.4 million) within this year.
DongA Bank is completing the plan to hike its chartered capital to VND5,000 billion ($238 million) which will be scaled up to VND6,000 billion ($285.7 million) by late 2012 from VND4,500 billion ($214.2 million).
Kien Long Bank’s current chartered capital is VND3,000 billion ($142.8 million).
But, the bank still has no intention to raise its chartered capital this year, according to its 2012 general shareholder meeting documents.