Vietnam's Phuong Tay Bank plans merger with Petrovietnam Finance
HANOI, March 12 |
HANOI, March 12 (Reuters) - Partly private Phuong Tay Bank said it plans to merge into Petrovietnam Finance Corp (PVFC) as part of the Vietnamese central bank's scheme to restructure lenders saddled with mountains of bad debt.
The tie-up will turn Phuong Tay Bank and PVFC, state oil and gas group Petrovietnam's finance arm, into a single mid-sized bank with combined equity of 9.16 trillion dong ($438 million), Phuong Tay said in a merger plan sent to shareholders.
The Mekong Delta-based Phuong Tay Bank is Vietnam's 29th partly private lender by assets. It is also known as Western Bank.
PVFC is 78 percent owned by Petrovietnam and 10 percent owned by Morgan Stanley.
The merger, expected to be completed this year, will rescue Phuong Tay Bank from its bad debts, raise PVFC's competitiveness and cut the size of Petrovietnam's stake in PVFC, the plan said.
Phuong Tay Bank said it would have "difficulties with medium and long-term liquidity without adjustments in funding and assets" arising from the merger.
The government has ordered Petrovietnam to sell out of PVFC -- which has at least 2.8 trillion dong in bad debt -- and concentrate on its core oil and gas businesses.
PVFC officials could not be reached for comment.
PVFC shares ended the morning session at 11,500 dong per share on Tuesday, up 1.8 percent, Ho Chi Minh Stock Exchange data showed.
The central bank has said around 10 ailing lenders will be restructured by the end of this year.
So far three small lenders in Ho Chi Minh City have been merged to form the Saigon Commercial Bank, while Habubank has been acquired by Saigon-Hanoi Bank.
Two leading partly private lenders, Eximbank and Sacombank, also plan to merge in the next three to five years despite not being involved in the central bank's consolidation plan.
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