Vietnam Central Bank Supports SHB and HBB's M&A In Principle; Not Yet Approves Officially

However, the document only serves to express the central bank's own opinions on the issue, but not the SBV's official approval yet. In the document, the central bank also required the two lenders to carry out necessary procedures to conduct the merger successfully.

Earlier, Saigon-Hanoi Commercial Joint Stock Bank (SHB) was reported to have been seeking to acquire the entire Hanoi Building Commercial Joint Stock Bank (Habubank or HBB).

According to the newspaper, the two lenders have already signed a "Memorandum of Understanding No. 01/2012 dated 8/3/2012 HBB - SHB", in which the two parties agreed on a share conversion ratio of 1.34 HBB's shares for 1 SHB share.

Habubank will transfer all of its assets, rights, obligations, labours and legal interests to SHB, putting an end to the brand-name Habubank.

SHB and Habubank were also reported to hire Vietcombank Securities Co., Ltd (VCBS) as the consultant firm for the acquisition and select Ernst & Young (E&Y) to audit their financial statements up to the acquisition date.

The two lenders will organise their shareholders' meetings, seeking approval for the merger no later than April 15, 2012 for Habubank and April 30, 2012 for SHB. However, the merger time will depend on the central bank's final decision.

In 2012, SHB was classified into Group I and allowed to expand credits at maximum 17 percent while Habubank belongs to Group III and was assigned credit growth of at most 8 percent.

Source: dailynews.vn