Shareholders of the HCM City Development Joint Stock Commercial Bank (HDBank) have approved a plan to acquire the Ha Noi-based Petrolimex Group Commercial Joint Stock Bank in an all-stock deal. At the HDBank annual general meeting held on April 21 they approved taking over PG bank by paying 0.621 share for every share of PGBank.
They also approved a strategic co-operation programme with the State-owned Viet Nam National Petroleum Group (Petrolimex) to exploit the advantages offered by the country’s biggest petroleum retailer.
Shareholders of PG Bank also agreed to the takeover by HDBank at its annual general meeting on the same day. The bank has already wrapped up the formalities.
Following the takeover, HDBank will have a charter capital of VND12.81 trillion (US$564.32 million).
It will have 15,371 employees, 73 branches and 235 transaction offices.
PGBank had a small capital base, which made it difficult to meet borrowers’ increasing credit needs.
The acquisition by HDBank is an effective outcome for PG Bank since its biggest shareholder, Petrolimex, has had to draw up a roadmap for reducing its ownership of the lender.
HDBank was responding to the Government’s appeal to participate in the banking sector restructure to help consolidate weak banks.
The acquisition will help it develop its retail segment, thus diversifying its products and easing its reliance on credit growth.
The two banks will be able to expand their scale of operations, particularly in the lucrative retail segment thanks to their large combined retail network, and also their financial resources, thus developing and improving the quality of their existing products and services.
The HDBank shareholders meeting also saw the tabling of a report on its record high profit in 2017, which made it one of the most profitable lenders in the country.
The bank’s pre-tax profit surged by 110.6 per cent to VND1.282 trillion (US$51.9 million).
For the past five years HDBank has been reporting high profits following its acquisition of DaiABank and Société Générale Viet Finance (SGVF) a few years ago, listing on the stock market and strategic sales of its stocks to foreign investors early this year.
Its assets at the end of 2017 were up 26 per cent to VND189.334 trillion.
Its non-performing loans were down to 1.51 per cent.
It had deposits of more than VND100 trillion, up 27 per cent from 2016, and credit growth was 17 per cent.
Based on the solid performance, the bank is set to pay dividends of 35 per cent, 15 per cent in cash and 20 per cent in the form of stocks, for 2017.
In 2018 HDBank targets increasing its assets to VND242.865 trillion and pre-tax profits to VND3.921 trillion, up 62.2 per cent.
It expects to keep bad debts under 2 per cent.