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Banking & Finance

Maritime Bank has no plans to merge

Released at: 16:41, 26/05/2017

Maritime Bank has no plans to merge

Photo: Quang Huy

Chairman tells AGM that any merger would not be good for its long-term plan.

by Quang Huy

Two small-sized banks have expressed a hope of merging with Maritime Bank but the Board considers it may not be good for its long-term plan and the handling of backlogs following a previous merger in 2015, Chairman of Maritime Bank, Mr. Tran Tuan Anh, told its annual general meeting (AGM) on May 26.

The Board has planned to divest from PG Bank, but due to the ongoing merger between PG Bank and Vietinbank, this has now been delayed until that process is completed. According to the Chairman, Maritime Bank currently holds 4.85 per cent of Military Bank, 9.98 per cent of PG Bank, and less than 5 per cent of PVcomBank.

On another note, only 3 per cent of shareholders with voting rights approved the bank’s plan to list on Vietnam’s stock exchanges. It had announced in January the listing of 1.17 million shares on the Unlisted Public Company Market (UPCoM), but the bank’s shares as of now are still traded in the over-the-counter (OTC) market.

Like most other Vietnamese banks, Maritime Bank last year focused on recovering and resolving major non-performing loans (NPLs) under the State Bank of Vietnam (SBV)’s guidance. It had an NPL ratio of 2.17 per cent at end-2016, with risk provision costs up 3.3 times from a year earlier, resulting in the bank’s pre-tax profit for 2016 increasing just 3.8 per cent from a year ago, reaching VND164 billion ($7.2 million).

As at December 31, the bank’s total assets had increased 11 per cent against 2015 to VND92.6 trillion ($4.07 billion) and total customer lending was up 8 per cent to VND54.2 trillion ($2.4 billion). Conversely, total mobilized capital fell 6 per cent to VND61.8 trillion ($2.7 billion), mainly due to an incident last June, when rumors began to circulate regarding the bank’s business activities and liquidity.

In 2017, Maritime Bank considers safety and caution as top priorities, with the NPL ratio to be below 3 per cent by the end of the year. It projects a 15 per cent rise in total assets, 17 per cent in mobilized capital, and 14 per cent in outstanding credit. Pre-tax profit is to rise only slightly compared to 2016, to VND165 billion ($7.26 million), and the bank plans to pay a 5 per cent dividend, which won shareholder approval at the AGM. It will be conducted after being approved by the central bank.

As part of the country’s banking sector reforms, Maritime Bank completed its merger with the small, unlisted Mekong Development Bank in 2015.

The State Bank of Vietnam’s Circular No.36 in 2014 regulates commercial banks hold shares in two other commercial institutions at a maximum, except for cases where the other institutions are subsidiaries of that commercial bank. The limit on investment in another commercial bank is 5 per cent of its voting rights.

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