The State Bank of Vietnam has approved merger between Sacombank, a large partly private lender, with the smaller Phuong Nam Bank (Southernbank), the Thanh Nien newspaper reported.
The merger, which is part of the government’s strategy to consolidate the country’s banking industry, has been planned since November.
Under the terms of the deal, one share of Southernbank will be swapped for 0.75 Sacombank share.
The merger is expected to boost Sacombank’s assets to over VND290.86trn ($13.31bn) and its capital to over VND18.85trn ($863.18m).
The central bank will assign some officials to join Sacombank’s management upon completion of the transaction.
At the same time, the State Bank of Vietnam will take over the shares owned by Sacombank deputy board chairman Tram Be.
Be and his family reportedly held over 20% of shares in Southernbank and about 7% in Sacombank as of 2014 end.