Merger and acquisition in project restructuring the system of credit institutions during 2011 2015 ,graduation thesis

STATE BANK OF VIETNAM MINISTRY OF EDUCATION AND TRAINING BANKING ACADEMY FOREIGN LANGUAGE FACULTY -***** - GRADUATION THESIS MERGER AND ACQUISITION IN PROJECT “RESTRUCTURING THE SYSTEM OF CREDIT INSTITUTIONS DURING 2011 – 2015” Student : Nguyen Tien Dat Student code : 16A7510200 Class : K16ATCD Supervisor : Mr Ngo Tung Anh (MA, MBA) Hanoi, May 2017 i|Banking Academy Graduation Thesis DECLARATION I certify that this thesis is my own independent work The data in the thesis has a specific origin and is up to date Hanoi, May 2017 Nguyễn Tiến Đạt ATC-K16 Nguyen Tien Dat ii | B a n k i n g A c a d e m y Graduation Thesis ACKNOWLEDGEMENTS I would like to express my deep sense of gratitude to my supervisor, Mr Ngo Tung Anh (MA, MBA) for his enthusiasm and favourable comments throughout my graduation thesis Besides offering constructive suggestion for reference resources, he remarked and analyzed important points to make my graduation thesis better Moreover, I would like to give my sincere appreciation to lecturers in Banking Academy in general and the Faculty of Foreign Languages in particular for equipping me with valuable knowledge for my study and career Last but not least, special thanks are also to my family and friends for their great support as a great encouragement to me Due to the limited time and capacity, I hope that readers would sympathize with me and give feedback for improving the thesis Hanoi, May 2017 Nguyễn Tiến Đạt ATC-K16 Nguyen Tien Dat iii | B a n k i n g A c a d e m y Graduation Thesis ABSTRACT Facing the opportunities and challenges in the process of regional and global economic integration, the restructuring of Vietnam banking system in the period 2011-2015 under Project 254 has been contributing to consolidating financial strength, building a healthy and reputable business market One of the solutions that has been effectively applied is the restructuring by bank M&A The thesis on Merger and acquisition in project “Restructuring the system of credit institutions during 2011 – 2015” has studied the effectiveness of bank M&A activities, clarified and made comments in many aspects First, the researcher has consulted and summarized the general theories of M&A activities in general and in the banking sector in particular Next, in addition to identifying the motivations for M&A activities among commercial banks, the researcher provides a comprehensive picture of the situation and generally assesses the results of the restructuring by M&A in Vietnam Based on the data collected, some typical M&A deals are carefully analyzed according to the roles of the participants and the time sequence as before, during and after the M&A process Finally, in order to realize the orientation of the banking system restructuring that the government has put forward and based on predictions of the development of M&A activities, lots of solutions and recommendations, not only just for the State Bank of Vietnam (SBV) and other authorities but also for commercial banks in particular, have been proposed ATC-K16 Nguyen Tien Dat iv | B a n k i n g A c a d e m y Graduation Thesis LIST OF ABBREVIATIONS ACB Asia Commercial Bank AEC ASEAN Economic Community ATM Automated Teller Machine BIDV Bank for Investment and Development of Vietnam CAR Capital Adequacy Ratio CTG CTG Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) Vietnam Joint Stock Commercial Bank For Industrial And Trade (Vietinbank) EAT Earnings after tax EBT Earnings before tax EIB Vietnam Export Import Commercial Joint Stock Bank (Eximbank) EUR Euro FED Federal Reserve System (of the United States) Ficombank First Commercial Bank FTA Free trade agreement GPbank Global Petro Commercial Joint Stock Bank HBB Hanoi Building Commercial Joint Stock Bank (Habubank) HD Bank Housing Development Commercial Joint Stock Bank HSBC The Hongkong and Shanghai Banking Corporation IFC The International Finance Corporation M&A Merger and Acquisition MDB Mekong Development Joint Stock Commercial Bank MHB Mekong Housing Bank MSB ATC-K16 Vietnam Maritime Commercial Joint Stock Bank (Maritime Bank) Nguyen Tien Dat v|Banking Academy Graduation Thesis NPL Non-performing Loan NVB National Citizen Commercial Joint Stock Bank (NCB) OCB Orient Commercial Joint Stock Bank OCBC Oversea-Chinese Banking Corporation Bank PGbank Petrolimex Group Commercial Joint Stock Bank ROA Return on Assets ROE Return on Equity SBV The State Bank of Vietnam SCB Saigon Joint Stock Commercial Bank SeABank Southeast Asia Commercial Joint Stock Bank SHB Saigon Hanoi Commercial Joint Stock Bank STB Saigon Thuong Tin Commercial Join Stock Bank (Sacombank) Techcombank Vietnam Technological and Commercial Joint Stock Bank USD United States Dollars VAMC Vietnam Asset Management Company VCB Joint Stock Commercial bank for Foreign Trade of Vietnam (Vietcombank) VIBbank Vietnam International Commercial Joint Stock Bank VNCB Vietnam Construction Bank VND Vietnam Dong VPBank Vietnam Prosperity Commercial Joint Stock Bank WTO World Trade Organization ATC-K16 Nguyen Tien Dat vi | B a n k i n g A c a d e m y Graduation Thesis LIST OF TABLES AND FIGURES Table 2.1: Bad debt ratio of credit institutions in Vietnam 17 Table 2.2: Group & group over total outstanding loans in September 2011 18 Table 2.3: Categorization of Commercial banks 22 Table 2.4: M&A deals between Vietnam commercial banks 23 Table 2.5: HBB's classification of outstanding loans 2010-2011 25 Table 2.6: Income and cash flow of SHB 2012-2016 27 Chart 2.1: Vietnam M&A by sector in 2011 21 Chart 2.2: Capital of SHB 2011-2016 27 Chart 2.3: Total Assets 2010-2016 29 Chart 2.4: Lending 2010-2014 30 Chart 2.5: Mobilization 2010-2014 31 Chart 2.6: Earnings before and after tax (EBT – EAT) of BIDV 2012-2016 32 Chart 2.7: Capital of MSB in 2007, 2011, 2014 33 Chart 2.8: Assets of MSB in 2007, 2011, 2014 33 Chart 2.9: Capital of MDB in 2009-2011 37 Chart 2.10: Assets of MDB in 2009-2011 37 Chart 2.11: EBT of MSB and MDB, 2010-2014 38 Chart 2.12: Bad debt ratios of MSB and MDB, 2011-2015 39 Diagram 2.1: Relationship between related parties of MSB and MDB 35 ATC-K16 Nguyen Tien Dat vii | B a n k i n g A c a d e m y Graduation Thesis TABLE OF CONTENTS DECLARATION i ACKNOWLEDGEMENTS ii ABSTRACT iii LIST OF ABBREVIATIONS iv LIST OF TABLES AND FIGURES vi PART A: INTRODUCTION 1 Rationale to the research Objectives of the study Scope of the study Methodology of the study Structural organization of the thesis PART B: DEVELOPMENT CHAPTER THEORETICAL BACKGROUND 1.1 Definitions 1.1.1 Restructuring banking system 1.1.2 Commercial banks 1.1.3 Merger and Acquisition in banking system 1.2 M&A Classification 1.2.1 Relatedness of the business activities 1.2.2 Territory 1.2.3 Strategies 1.3 Strengths and Weaknesses 1.3.1 Strengths ATC-K16 Nguyen Tien Dat viii | B a n k i n g A c a d e m y Graduation Thesis 1.3.2 Weaknesses 1.4 Methods 11 1.4.1 Tender offer 11 1.4.2 Proxy fight 11 1.4.3 Negotiation 12 1.4.4 Collection of stocks on the securities market 12 1.4.5 Purchasing property 12 1.5 Lessons from the world for Vietnam 13 1.5.1 JP Morgan Chase – Bank One Corp 13 1.5.2 ABN AMRO (Netherlands) – Barclays PLC (Britain) 14 1.5.3 Bank of America – Merill Lynch Bank 15 1.5.4 Drawn Lessons 15 1.6 Sub-conclusion 16 CHAPTER THE REALITY OF M&A IN VIETNAM SYSTEMIC BANK RESTRUCTURING 17 2.1 Motivations for bank M&A in Vietnam 17 2.1.1 Subjective reasons 17 2.1.2 Objective reasons 19 2.2 Overview of Vietnam commercial banking M&A 20 2.2.1 Foreign Participation 21 2.2.2 Domestic 22 2.2.2.1 General evolution 22 2.2.2.2 Some deals 24 - SHB and HBB 24 - MHB and BIDV 29 ATC-K16 Nguyen Tien Dat ix | B a n k i n g A c a d e m y - Graduation Thesis MSB and MDB 32 2.3 General assessment 39 - Advantages 39 - Disadvantages 41 2.4 Sub-conclusion 42 CHAPTER SOLUTIONS AND RECOMMENDATIONS 43 3.1 Outlook for Vietnam commercial banking 43 3.1.1 Restructuring orientation for the period from 2016-2020 43 3.1.2 Trend of M&A prediction 45 3.2 Recommendations 47 3.2.1 For the State Bank and other authorities 47 3.2.2 For Commercial banks 50 3.3 Sub-conclusion 55 PART C: CONCLUSION 56 Recapitulations and concluding remarks 56 Implications 57 Limitations and proposals for further study 57 REFERENCES x ATC-K16 Nguyen Tien Dat 45 | B a n k i n g A c a d e m y Graduation Thesis contribution According to the SBV governor, if violations occur, they will be permanently banned from participating in banking management 3.1.2 Trend of M&A prediction No bank wants to be taken over by another bank one day However, in the context of the 2016-2020 and further, the M&A trend will continue to be maintained as a way for banks to accumulate more values than the individual operation After purifying the weak banking system, the SBV will have less impact on M&A transactions than it did on a series of VND banks Commercial banks will now actively seek each other for M&A according to the market mechanism There are several reasons for supporting the M&A trend of banks Prior to the development trend of integrated economy, M&A activities will help commercial banks meet the inevitable needs While banks have been aggressively racing on the SBV's chartered capital increasing route, these figures are still small to address regional and world-wide development Promoting economic benefits of scale will continue to be the target of M&A deals in the banking sector, especially small joint-stock commercial banks In addition, with the benefits of M&A, commercial banks can save time, take a leapfrog to penetrate new markets, possess qualified human resources and modern technology An important point in the trend of regional and world integration and competition will be fiercer M&A has helped banks reduce their competition by reducing their competitors in the market and increasing their competitiveness after M&A as well From an objective standpoint, the process of conducting M & A deals will be easier that the legal framework has been basically completed Apart from relevant laws such as corporate law, investment law, competition law, securities law, credit institutions, etc, the SBV also issued Circular No 04/2010/ TT-NHNN regulating the merger, consolidation and acquisition of credit institutions In the future, legal ATC-K16 Nguyen Tien Dat 46 | B a n k i n g A c a d e m y Graduation Thesis documents on banking in general and banking M&A in particular will continue to be finalized and supplemented With the role of state management authority, M&A deals will be reviewed and supported by SBV Based on the development strategy and the characteristics of each bank and market, each commercial bank has its own M & A approach Based on the size, the combination of similar banks or big banks with small banks is likely to happen With banks of the same scale, the mutual attractions between the two parties mainly come from their own advantages in terms of products and customers This combination creates a new bank with good development potential and dominant in the market Meanwhile, the M&A between large banks and small banks is a way for large banks to penetrate niche markets, avoiding ignoring potential market shares, especially in times of competition Moreover, the bank's resistance will be increased thanks to the management capacity of larger banks Based on the integration factor, the process of trade liberalization will be made stronger in the banking sector To this, the state will reduce its protection to banks by gradually withdrawing capital or reducing state ownership in many banks In addition, the Vietnamese market also attracted many investors, the big ones in the banking and finance industry in the world They will acquire the domestic banks as an initial step to enter the market In contrast, with the ongoing development effort, many banks in Vietnam have taken the opportunities to exploit other emerging markets as a way of enhancing their competitive value Based on products and services, banks and insurance companies, securities companies, etc., will implement M&A to form financial and banking groups With the nature of cash flow activities, products of banks and finance companies will complement each other Packaged products with optimal cost, minimizing risks for both customers and service providers will be created The relationship between the ATC-K16 Nguyen Tien Dat 47 | B a n k i n g A c a d e m y Graduation Thesis bank and the service provider is also reflected here In fact, many potential banks are still hiring, combined with card services and international payment In the future, this relationship may be abolished by M&A activity In other words, M&A activity also demonstrates the competition out of the banking market to the financial-banking market in general 3.2 Recommendations 3.2.1 For the State Bank and other authorities - Completing the legal system for M&A activities The booming period of Vietnam's banking system and the subsequent series of scandals, leading to M&A deals to avoid the risk of system collapse, put Vietnam's legal system and its ability to improvise, to solve problems of stakeholders to the test Although the issues have been basically resolved, many loopholes in the legal system and the embarrassment of resolving the situation have been pointed out In fact, in order to create an equal business environment and fair competition, the government needs to finalize the legal provisions of M&A activities in the Credit Institutions Law and be clearly guided in circulars Moreover, with the system of legal documents overlapped on a problem, the SBV should unify the definitions, concepts, conditions and specify the scope of regulation M&A is essentially an act of economic concentration, which shifts demand and supply and affects the fairness of the market The SBV and other authorities are faced with two main issues that are not only the acceptance of competition for wide and deep economic integration but also the elimination of restricted practices in competition Thus, by means of legal instruments, competing activities should be clearly and specifically defined that the names of banned economic concentrations should be called out At the same time, government authorities should review and adjust the law in line with economic relations, international practices and ATC-K16 Nguyen Tien Dat 48 | B a n k i n g A c a d e m y Graduation Thesis commitments in associations and agreements in which Vietnam has been participated such as AEC, WTO, APEC, etc Based on the ability and situation of the banking system in Vietnam that has been basically stable, the activities to attract foreign capital should be actively implemented Allowing for a higher shareholding of foreign investors at banks will attract more investment funds to Vietnam and help the government deal with bad debts Decree No 01/2014/ND-CP stipulates that a foreign strategic investor owns share of up to 20% of chartered capital in a domestic bank, individual ownership shall not exceed 5% and the total foreign ownership of this bank is no more than 30% With diversification of ownership to minimize risks, while motivating the development of the bank through attracting foreign capital, authorities should study to consider raising the ceiling rate to enlarge the foreign room Currently, weak banks such as Oceanbank, GPbank have received permission to buy 100% of foreign capital, but there are still many legal obstacles that have not succeeded Last but not least, around the M&A activities, the provisions of the law governing property transfer issues, stock transactions, labour, taxes, etc should be more fully defined - Enhancing the role and responsibility of banking inspection and supervision agencies With the attitude of "prevention is better than cure", the SBV should have a plan to generally assess and review the current status of the banking market in order to have an overview of the M&A trend, ensuring that the number of commercial banks is just enough to meet the actual needs of the economy and social life Instead of small banks, weak banks are the problem that needs to be completely solved, because of the primary goal of the restructuring of the system Specifically, the SBV needs to ATC-K16 Nguyen Tien Dat 49 | B a n k i n g A c a d e m y Graduation Thesis resolutely handle the weak credit institutions which fail to meet safety regulations and deal strictly with violations of monetary law and banking management - Early establishing the M&A market in Vietnam M&A should be regarded as essential economic activity to improve the financial capacity of credit institutions In spite of reducing the number of organizations in the market, the investment value is still preserved that they are only transferred from one subject to another which operates effectively and exploits better Thus, the supply and demand factors are sufficiently converged, and M&A should be planned as a professional market, especially for banking sector This market needs to ensure many factors First of all, as the regulator and market manager, the SBV and other authorities must always promote the interests of depositors and borrowers, in combination with ensuring system security In order to encourage more participants to join the market and to facilitate successful M&A deals, legal procedures need to be simplified but still ensure the full benefits of parties involved in M&A contracts The greater the number of participating businesses, the more funds traded in this market In order to give investors an overview and accuracy of the target bank's architecture, asset valuation standards should be issued Cases of manipulating prices to undersell banks in favor of profiteers should be discarded In addition, transparent information control system in banking operations should be developed In M&A activities, information about brands, markets, customer segment, and management is essential to avoid risk for both buyers and sellers Currently, many banks are aware of the importance of information in attracting investors and creating trust for customers by regularly updating the news on the ATC-K16 Nguyen Tien Dat 50 | B a n k i n g A c a d e m y Graduation Thesis website However, on the basis of technology, the SBV should play a focal point in building up the information system for tracking, aggregating information and reporting on the situation of banks In particular, to ensure the quality of information collected in line with the trend of integration, the SBV should require commercial banks to standardize their financial statements in accordance with international accounting and auditing standards By the experience of managing its banking system, initially, the SBV still had to create the agency which was responsible for M&A advisory services The consulting firm plays the role of intermediary between the acquiring banks and the target banks for facilitating the implementation of legal paperwork, strategic advices, bank selection, negotiation of prices and etc This work decides the success of the M&A deal Gradually, according to the needs of the market, private organizations providing professional M&A consultancy who are well-versed in Vietnamese commercial banks will be formed Till that time, the SBV will act as the quality and operation control body of these consulting organizations 3.2.2 For Commercial banks - Improving financial capacity Banks should continue to upgrade their chartered capital to demonstrate their financial ability, while ensuring safety rates of their banking operations Banks also need to consider the timing and methods of raising capital, on the basis of transparency of operating information and business results to maximize capital sources in the market For weak or small banks, self-financing is extremely difficult and cost much time and effort These banks need to boldly conduct merger into large banks in order to raise capital and financial capacity Compared to bankruptcy due to insufficient competitiveness or ineffective core operations, M&A with another bank is more ATC-K16 Nguyen Tien Dat 51 | B a n k i n g A c a d e m y Graduation Thesis prudent However, aspirations for M&A may not be met because other banks can choose other ways to raise capital For commercial banks operating well, with medium capital or over, they may issue additional shares to increase their chartered capital or speed up the listing of shares on the stock market (if not listed) In addition, in order to retain the loyalty of the client, the trust of the investor, commercial banks, before, during and after the process of raising capital or M&A, should provide sufficient and transparent information about the process Besides paying attention to the size of capital, banks also have to focus on other sufficient conditions such as bad debt management, making loans and capital mobilization The competitive pressure has forced banks to race on interest rates, loosen credit requirement, and make no provision for bad debts to achieve the planned profit When the bad debt ratio is out of control causing the consequences such as stock prices evaporated or customers withdraw money massively The lesson on race growth leading to high rates of bad debt should be learned by experience to avoid recurrence Firstly, commercial banks need to seriously adhere to the prudent principle of provisioning as regulated by the SBV Next, the review, reassessment, and classification of debt needs to be done on a regular schedule In addition, the bank should cooperate closely with the debtor to make sure of the loan affordability and actively support customers to overcome initial difficulties At the same time, close coordination with VAMC has been done to implement the solutions to handle bad debt For capital mobilization, commercial banks are advised to segment the market properly to focus on caring, manage resources, reduce costs and improve business efficiency Each bank should invest in market research activities, explore the needs of customers to provide appropriate products and services to attract capital resources On the contrary, banks must evaluate credit projects with prudence, such as securities lending, real estate, manufacturing, etc However, to save time for ATC-K16 Nguyen Tien Dat 52 | B a n k i n g A c a d e m y Graduation Thesis customers, commercial banks need to re-examine appraisal and lending procedures so that they are as streamlined and efficient as possible - Building a reputable brand With each bank, the brand is an intangible asset that contributes to value and impress customers or investors that help distinguish one bank from another More specifically, reforming banks by M&A activities means rebuilding their brand This is an opportunity to resonate the brand value of the target bank and the acquiring bank Strengths will be enhanced to replace reviews on weaknesses through a series of service attitude improvements, provided transparent banking information, efficient and fast transactions, the way to deal with customers' situations, etc To this, banks must carefully study the culture of each customer type and markets, from which effective public relations and communication should be done - Attaching special importance to the development of quality human resources Before, during and after implementing bank M&A, the trend of moving manpower from one bank to another, into and out of the banking sector is unavoidable Thanks to the art of human resources management, banks can not only eliminate brain drain but also promote and accumulate more skilled labour First, as soon as the bank's M & A information is spread, leaders must quickly reassure workers With the target bank, information about future orientation of the staff at the bank after M&A should be clear about new responsibilities and benefits Meanwhile, at the acquiring bank, the plan of administrative organization, work division must be carefully studied to allocate reasonable manpower, ensuring using the right people for the right job Therefore, cumbersome organizational structures are avoided and no expenses are spared Bonding activities and dialogue between leaders and employees are needed more than ever to promote corporate culture, internal solidarity At that time, difficulties in the early days of the bank's operations ATC-K16 Nguyen Tien Dat 53 | B a n k i n g A c a d e m y Graduation Thesis after the M&A will be shared between the leader and the staff, eliminate the gap between old and new employees so that the compensation policy in tough time will be easier to implement On the side of employees, being fear of job losses, a set of employees will actively improve their knowledge, qualifications and practical experience In order to facilitate the learning of employees and to ensure the quality of the bank's overall performance, trainings on professional ethics, law, business, foreign language and soft skills must be held regularly Training activities should be conducted in a variety of forms between theory and practice or a mix of independent working skills and teamwork Each level of staff needs to be standardized differently For example, with employees who deal directly with customers, it is important to focus on the basis of communication and usual business skills At the management level, the training is more complicated because with the banks after M&A, the number of employees and branches will increase a lot, the workload is more complex as well Leaders need to be trained from basic skills such as team management, job division and management to responsible skills such as risk management, supervision and inspection As the barriers to personnel movement, out of the industry between banks and other industries are not high, the bank needs to take measures to ensure the supply of labor to compensate for the annual layoffs or when the bank expands the scale One common solution is that banks build relationships with universities and specialized academies to take the output from there At present, many banks have their own training centers to help fresh graduates to bridge the gap between theory and practice and to regularly update their knowledge and skills for the entire staff In addition, inevitably solving problems in the non-strength field, commercial banks need to have policies to attract leading experts ATC-K16 Nguyen Tien Dat 54 | B a n k i n g A c a d e m y - Graduation Thesis Making breakthrough with technology There is no limit for the development of technology, including in the banking industry The value that technology brings is not only the pursuit of customer convenience, but also makes the internal operation of the bank more smooth and efficient In addition to the traditional products and services, commercial banks are investing heavily in technology development, upgrading their products daily and hourly such as mobile banking, Internet banking or 24/7 customer care centre Customer transactions are now easier and faster than ever before with a wide variety of products and services available online such as bill payments, savings deposits, foreign exchange transfers, etc However, banks should be flexible in developing technology for each client in order not to skip those who are less likely to have access to technology, such as low-income earners and older clients by simpler and easily accessible technology Another advantage that technology brings is to help banks perform internal operations more easily and economically With the internal communication system, the profiles and documents are circulated quickly and decisions are implemented immediately It helps to save costs and time for both banks and customers In addition, instead of spending a big a mount of money to expand the branch, banks can choose online banking solutions that are still effective As long as technology for products and services is developed, banks should focus on security technology Banks can grow rapidly thanks to technology but can collapse as fast if suddenly customer accounts are illegally withdrawn, bank's websites are tampered or confidential information is hacked The bank should take precautionary measures and prevent early, avoid the unfortunate occurrence ATC-K16 Nguyen Tien Dat 55 | B a n k i n g A c a d e m y - Graduation Thesis Linking with other banks to create collective strength Each bank has its own strength so a single customer who owns many accounts at many banks is indispensable In front of strong competitors from abroad, domestic banks should link together to gather strengths to develop the banking system in Vietnam Instead of competing with the interest rate race as before, banks should consider affiliate networks as a place to learn from each other, make cash flow smoothly and provide a good customer experience 3.3 Sub-conclusion First of all, the chapter summarizes and clarifies the development orientations for banking restructuring in the period 2016-2020 and predicts the inevitable development trend of bank M&A in the context of extensive economic integration Based on the restructuring situation in the previous period together with the plans for the following years, many solutions have been raised to help M&A overcome the constraints presented in the previous chapter, to promote the strenth and create more opportunities for Vietnam banking system in general and M&A in banking sector in particular ATC-K16 Nguyen Tien Dat 56 | B a n k i n g A c a d e m y Graduation Thesis PART C: CONCLUSION Recapitulations and concluding remarks In the roadmap of restructuring banking system to overcome bad debts, develop a healthy and safe banking system, the SBV has emphasized: "M&A is an objective tendency to improve the competitiveness of banks" In fact, bank M&A brings greater added value for banks than standing alone These benefits come from the larger size of the bank and advantages of each party such as enhancing brand value, reducing costs, widening distribution networks and more M&A is flexible between banks of the same size, or between larger banks and smaller banks, because each of these forms is beneficial to the parties involved Based on the available legal documents, the SBV, facilitating not only the interests of the participating banks, but also the banking system, is ready to provide technical assistance to banks seeking M&A In general, bank M&A has taken a positive turn in the recent period as dealing with many weak banks and improving the overall situation of the banking system However, it is still early to make conclusions about the effectiveness of banks after M&A These banks need time to really stabilize internally and optimize the resources from the banks before the M&A In addition, there are still unfinished M&A transactions that require positive impacts from the SBV to resolve conflicts of interest among the parties With the development and integration orientation of the economy in general, the operation of commercial banks and M&A activities should be placed under the overall supervision and regulation between the SBV and other authorities The sanctions need to be carefully studied, tested and learned in order to gradually achieve the goals ATC-K16 Nguyen Tien Dat 57 | B a n k i n g A c a d e m y Graduation Thesis Implications Banking is only one link in the chain of economic activities of a nation Through the reform of the banking system with M&A, Vietnam is moving towards a sustainable, market-oriented and comprehensive integration Industries such as textiles and garments, retail and fast-moving industry are expected to boom thanks to M&A deals in the coming years In parallel with this, the Government is step by step equitizing State-owned enterprises, actively opening up and attracting foreign capital into Vietnam In addition to regional and global competitiveness, core safety norms are maintained to prevent fluctuations from inside and outside Limitations and proposals for further study M&A activities has long been around the world and popular in many areas However, bank M&A activities in Vietnam have been initially developed due to subjective factors and the market mechanism has not been promoted During the study of the thesis, the researcher has tried to add many dimensions from books, reports, media, newspapers and previous studies, but inevitably the shortcomings and limitation are aware Researchers are looking forward to receiving contributions from teachers and other people of mutual interest to develop the topic better ATC-K16 Nguyen Tien Dat x|Banking Academy Graduation Thesis REFERENCES  Books and materials Claudia Dziobek & Ceyla Pazarbasioglu 1998 Lessons from Systemic Bank Restructuring International Monetary Fund Nguyen Xuan Thanh, 2016 Vietnam commercial banks: from the changes in laws and policies in the period of 2006-2010 to the restructuring event in the period of 2011-2015 Fulbright Economics Teaching Program To Ngoc Hung & Nguyen Duc Trung, 2012 Vietnam banking activities - Looking back at 2011 and some solutions for 2012 Banking Science and Training Magazine, Banking Academy of Vietnam Tran Thi Thu Huong & Nguyen Bich Ngoc, 2014 Bank M&A in Vietnam – Reality, motivations and challenges in the coming time Banking Magazine, the State Bank of Vietnam Vien The Giang & Bui Huu Toan, 2012 Merging, consolidating, acquiring credit instituions – solutions for building safe and healthy banking system in Vietnam nowadays Banking Science and Training Magazine, Banking Academy of Vietnam Waxman, Margery 1998 A legal framework for systemic bank restructuring Washington, DC: World Bank  Legal Documents Circular 04/2010/TT-NHNN (2010), The State Bank of Vietnam Decision 369/QĐ-TTg (2013), The Government of Vietnam Decision No.254/QĐ-TTg (2012), The Prime Minister of Vietnam Decree 141/2006/ND-CP (2006), The Government of Vietnam Decree No 01/2014/ND-CP (2014), The Government of Vietnam Instruction 01/CT-NHNN (2017), The State Bank of Vietnam Law on Competition (2004), The National Assembly of Vietnam Law on Credit Institution (2010), The National Assembly of Vietnam ATC-K16 Nguyen Tien Dat xi | B a n k i n g A c a d e m y Graduation Thesis  Webstites Banks’websites http://cafef.vn/ http://vietstock.vn/ http://www.investopedia.com/ http://www.sbv.gov.vn http://www.spiegel.de/ https://www.bankofamerica.com/ https://www.sec.gov/ ATC-K16 Nguyen Tien Dat