HANOI, April 21 Vietnam's Maritime Bank on Monday said it plans to merge with Mekong Development Bank (MDB) to boost the pair's financial strength and increase competitiveness.
A merger between the country's 12th biggest partly private bank by assets and its smaller rival would come after the central bank in 2011 allowed restructuring in the sector as part of reform to reduce bad debt.
Maritime Bank shareholders approved the merger plan on Sunday and tasked the board with seeking permission from the central bank, the Hanoi-based lender said in a statement on its website, without disclosing financial details of the plan.
Maritime had assets totalling $5.07 billion as at year-end, and already owns 10.16 percent of MDB, which had assets of $305 million.
MDB shareholders have approved the merger, which can take place after MDB repurchases a 20 percent stake in itself from Singapore's Fullerton Financial Holdings Pte Ltd, MDB said in a statement after an April 15 shareholder meeting.
At its own shareholder meeting, Maritime also projected a 34 percent fall in gross profit this year to 265 billion dong ($12.56 million) because of sluggish economic growth and slow recovery in the stock and property markets.
The lender aimed to keep bad debt below 3 percent of outstanding loans, compared with 2.71 percent last year, and targeted a 5 percent rise assets to 112 trillion dong.
Maritime is Vietnam's 13th largest partly private bank by registered capital with 8 trillion dong ($379 million) - twice that of MDB. A merger would take the lender into the top five, it said in the statement. Neither bank is listed. ($1 = 21097.5000 Vietnam Dong) (Reporting by Ho Binh Minh; Editing by Christopher Cushing)