Bad debt ratios of MSB and MDB, 2011-2015
Rationale to the research
Merger and Acquisition (M&A) activities have been prevalent since the early stages of developed economies, driven by intense competition among enterprises These activities not only help resolve competitive pressures but also encourage companies to leverage combined financial resources, technology, talent, and brand equity Consequently, M&A serves as a strategic tool for enhancing corporate capabilities and phasing out less competitive firms in the market.
Since the introduction of the Enterprise Law in 1999, M&A activities in Vietnam have gained significant attention, particularly following the emergence of the stock market in 2005 These activities span various sectors, with the banking and finance sector representing a substantial portion of the M&A landscape.
Vietnam's active participation in international integration through agreements and organizations like the World Trade Organization (WTO), the ASEAN Economic Community (AEC), and various free trade agreements (FTAs) highlights its commitment to enhancing economic collaboration However, this integration also brings potential risks associated with the banking sector's influence on the national economy, necessitating careful management and strategic oversight.
Between 2011 and 2015, the restructuring of credit institutions, outlined in Decision No 254/QĐ-TTg, effectively addressed key issues such as bad debts, capital pressure, and investor accessibility through mergers and acquisitions (M&A) activities.
Banks are currently in the initial phase of mergers and acquisitions (M&A), which are expected to persist throughout the government's economic restructuring This graduation thesis aims to analyze and assess the characteristics of M&A activities, specifically focusing on "M&A in Decision No 254" from multiple perspectives.
Objectives of the study
The thesis elicits and assesses information on M&A activities of Vietnam commercial banks under the pressure of restructuring by Decision No.254
This thesis aims to deliver essential insights into mergers and acquisitions (M&A) while highlighting significant transformations in the restructuring process Building on this foundation, the researcher forecasts upcoming M&A trends and offers strategic recommendations for banking operations in Vietnam.
Scope of the study
Due to time constraints, the thesis focuses on M&A activities in Vietnam restructuring banking system by Decision No.254, which is mainly from 2011 to
Methodology of the study
The thesis emerges from a comprehensive process of compilation, analysis, and comparison, drawing insights from economic literature and relevant official legislation It also involves the synthesis of secondary data, including financial reports, annual reports from research companies, stock exchange information, and a variety of articles, magazines, journals, and both domestic and international websites.
Structural organization of the thesis
Except for the introduction and conclusion, the thesis is divided into three main chapters and organized as follows:
Chapter 2: The reality of M&A in Vietnam restructuring banking system
THEORETICAL BACKGROUND
Definitions
Systemic bank restructuring involves coordinated measures essential for preserving the national payment system and ensuring access to credit, while addressing the underlying issues in the financial system that led to the crisis, as outlined by Margery Waxman in “A Legal Framework for Systemic Bank Restructuring.”
Systemic bank restructuring, as defined by Claudia Dziobek and Ceyla Pazarbasioglu in “Lessons from Systemic Bank Restructuring,” focuses on enhancing bank performance by restoring solvency and profitability This process aims to strengthen the banking system's ability to facilitate financial intermediation between savers and borrowers while also rebuilding public confidence in the financial sector.
Systemic bank restructuring aims to enhance the competitiveness of banks and the overall banking system It typically involves three main types of activities: financial restructuring, operational restructuring, and safety oversight Key measures such as business diversification, mergers and acquisitions (M&A), and equitization are implemented based on the specific types of banks, including commercial and state-owned institutions This restructuring process is primarily considered in response to emerging economic challenges and operational issues within banks.
In the 1990s, Vietnam initiated banking restructuring in response to vulnerabilities exposed by the Asian financial crisis From 2011 to 2015, the country faced the repercussions of the 2007-2008 financial crisis, leading to the introduction of Decision No 254, which aimed at systemic bank restructuring Key strategies included capital restructuring, addressing bad debts, enhancing public confidence in the banking sector, refining legal frameworks, and developing banking standards These measures were primarily executed through increasing foreign investment opportunities in Vietnamese banks and facilitating mergers and acquisitions among domestic banks.
Commercial banks serve as intermediary financial institutions, with definitions varying by country In the United States, they are trading companies focused on providing diverse financial services within the financial sector In France, commercial banks are establishments that accept public deposits and engage in activities such as discounting and offering credit or financial services Meanwhile, in Turkey, they are limited liability entities designed to accept deposits and conduct foreign exchange operations, public bills of exchange, discounts, and other borrowing activities.
Regulated in article 4 of law No.47/2010/QH12 on Credit Institutions, bank and commercial bank are defined as:
Credit institution means an enterprise conducting one, some or all banking operations Credit institutions include banks, non-bank credit institutions, microfinance institutions and people's credit funds
A bank is a type of credit institution authorized to perform various banking operations as defined by law Banks can be categorized into different types, including commercial banks, policy banks, and cooperative banks, based on their specific characteristics and operational goals.
Commercial bank means a type of bank which may conduct all banking operations and other business activities under this Law for profit
Banking operations means the trading in and regular provision of one or some of the following services: deposit taking, credit extension and via-account payment
Overall, commercial bank is a monetary trading organization receiving deposits from customers with the responsibility to repay and using that money for lending, discounting and payment facilities
1.1.3 Merger and Acquisition in banking system
The term "Mergers and Acquisitions" is a familiar term for economists in detail or for the business field in general The term refers to two concepts: “Mergers” and
“Acquisitions” Often, we are confused between mergers and acquisitions due to the similarities of these two activities and in many cases due to insufficient information to indicate differences
Mergers and acquisitions (M&A) refer to the consolidation of companies or assets, as defined by Investopedia According to Article 17 of Vietnam's Competition Law No 27/2004/QH11, a merger involves the transfer of all lawful assets, rights, obligations, and interests from one or more enterprises to another, while the merging entities cease to exist Conversely, an acquisition entails one enterprise purchasing all or part of another's assets to gain control over its operations.
Particularly, on circular 04/2010/TT-NHNN providing for the merger, consolidation and acquisition of credit institutions, the terms are construed as follows:
The merger of credit institutions involves the consolidation of one or more credit institutions, referred to as merged credit institutions, into another, known as the merging credit institution This process entails the simultaneous transfer of all lawful assets, rights, obligations, and interests from the merged institutions to the merging institution, resulting in the termination of the existence of the merged credit institutions.
The consolidation of credit institutions refers to the process where multiple credit institutions merge to create a new entity, transferring all legal assets, rights, obligations, and interests to the newly formed institution while simultaneously dissolving the original institutions.
The acquisition of credit institutions involves a process where one credit institution, known as the acquiring credit institution, takes over all legal assets, rights, obligations, and interests of another credit institution, referred to as the acquired credit institution Following this acquisition, the acquired credit institution becomes an affiliate of the acquiring credit institution.
A merger results in the formation of a new legal entity when two firms, often of similar size, agree to unite as one company, commonly referred to as a "merger of equals." In this process, the stocks of both companies are surrendered, and new shares are issued to the shareholders based on a specific ratio Conversely, an acquisition occurs when one company takes over another, leading to the target company ceasing to exist, while the acquiring company's stock continues to be traded.
M&A Classification
1.2.1 Relatedness of the business activities
Horizontal mergers and acquisitions (M&A) take place when banks that compete directly in the same market segment join forces In this scenario, the target bank(s) are previous rivals This type of merger is favored due to its potential to enhance competitiveness by reducing the number of competitors and lowering operational costs.
Vertical mergers and acquisitions (M&A) occur between banks operating within the same industry but targeting different market segments In this scenario, one bank acts as the buyer while the other serves as the seller These vertical M&As enhance value by utilizing the expertise and capabilities of banks within a chain, ultimately delivering greater added value to customers.
Conglomerate M&A refers to mergers and acquisitions that do not fit neatly into vertical or horizontal classifications, often occurring between banks This type of merger results in the formation of a larger economic institution, offering a diverse array of products and services across different sectors.
In domestic deal, the involved banks have headquarters in the same country
Cross-border mergers and acquisitions (M&A) involve a purchaser and a target bank from different countries, and they are increasingly favored over greenfield investments This trend is driven by several advantages, including significant cost savings, the ability to leverage existing resources, and enhanced access to local markets.
The acquiring bank engages directly with the management and board of directors of the target bank, typically securing agreement and support through negotiation A successful transaction is achieved when both parties establish mutually beneficial terms.
The board of directors of the target bank opposes the merger and acquisition (M&A) proposal, prompting the acquiring bank to strategically solicit shareholders to purchase shares in the stock market This approach allows the acquiring bank to gradually gain control over the target bank, aiming to prevent an unsuccessful deal.
Strengths and Weaknesses
A successful merger and acquisition (M&A) deal enhances a bank's capital, enabling it to effectively support capital-intensive projects Following consolidation, the banking landscape experiences reduced competition, leading to decreased pressure on raising deposit rates and lowering capital mobilization costs As a result, larger banks benefit from strengthened capital positions, while smaller banks achieve greater stability and safety during challenging economic periods.
In countries like England and America, banks that are unable to offset tax losses often become targets for mergers and acquisitions (M&A) Acquiring banks can benefit from these deals by utilizing the losses to reduce their tax liabilities, ultimately leading to increased profitability.
The profitability of merged banks tends to be more stable and robust compared to that of individual banks prior to the merger Consequently, these consolidated financial institutions demonstrate a greater capacity to manage and tolerate debt effectively.
Mergers and acquisitions (M&A) provide banks with abundant human resources and valuable customer and product information This leads to a significant reduction in operating costs, as many divisions can continue functioning without the need for additional manpower or shared facilities Furthermore, the insights gained from customer data can be leveraged to develop new products, optimizing features to align with effective business strategies.
Diversifying the product range and customers
The diverse range of products resulting from mergers and acquisitions (M&A) benefits both banks and customers As banks expand their offerings, they can attract more customers who prefer to remain loyal to a single institution that provides high-quality products For banks, an increased product variety can lead to reduced operational costs Additionally, post-M&A, banks are well-positioned to develop innovative products, including foreign exchange and derivatives, enhancing their competitive edge in the market.
Strict legal barriers can hinder a bank's entry into new markets, resulting in the loss of valuable market segments Mergers and acquisitions (M&A) provide a strategic advantage by lowering entry barriers, minimizing costs, and reducing risks compared to direct investments.
The rights of minority shareholders are significantly impacted following mergers and acquisitions (M&A), as the bank's charter capital experiences a substantial increase while individual shareholders’ ownership percentages diminish This shift often leads to the marginalization of minority shareholders during annual general meetings, resulting in a reduction of their rights and influence within the organization.
Both minority and majority shareholders may feel uneasy about their rights following a bank merger, as the newly merged entity will operate with increased equity Majority shareholders from the pre-merger bank could experience a loss of control due to a reduced percentage of voting rights Additionally, the expansion of the management board means that individual members have diminished influence compared to before the merger In their quest to regain control, these shareholders will actively seek cooperative solutions, and this pursuit will continue until all parties are content with their rights.
Uniform is the first thing to be affected Each bank has its own uniform, represents that bank’s unique features But after merging, they might have to change
Merging banks involves integrating distinct cultures into a cohesive new institution, requiring leaders to foster a unified working environment Employees may feel uncomfortable in a mixed cultural setting, necessitating effective communication strategies as they adapt to new colleagues from different banking backgrounds If management fails to harmonize these cultures, it could lead to distrust among staff and hinder the formation of a solid, united entity Without a clear approach, the merged bank risks becoming chaotic and fragmented, undermining its operational effectiveness.
Many employees feel anxious about their careers during a merger and acquisition (M&A) at their bank, as personnel adjustments are likely to occur to reduce operating costs and integrate business holdings This situation often leads to a brain drain, with employees leaving due to anticipated challenges or unfavorable working conditions Nevertheless, some individuals choose to remain in their previous or lower positions despite the difficulties, which largely depends on each employee's perspective and the management skills of the new leadership.
Methods
Bidding, or bid proposal, is a strategy used by an acquiring bank to purchase a target bank by offering existing shareholders a price above market value for their shares This attractive price incentivizes shareholders to relinquish ownership and management of their bank, often in a hostile takeover scenario Typically, the acquiring and target banks are competitors, with the target bank being relatively weaker; however, this dynamic is not limited to smaller businesses being acquired by larger firms.
Many instances have occurred where the opposite is true regarding bank acquisitions Banks often utilize loan surpluses to finance their bids A significant aspect of a tender offer is that it results in the target bank's management losing control, as the acquirer typically replaces the board of directors and key management positions once the tender is successful.
In hostile takeovers, banks often face stagnation and prolonged losses, leading to insufficient profits for shareholder dividends This dissatisfaction among shareholders prompts a desire for management change to improve the situation Acquiring banks strategically gather shares to entice these shareholders, ultimately aiming to replace the existing management with a new operating system Securities companies play a crucial intermediary role by facilitating the process, including the creation of records and contracts for dissatisfied shareholders.
This approach is suitable for amicable mergers, where two banks acknowledge each other's strengths and seek to unite for mutual advantage While this method can save time and resources for both parties, it is rarely realized in practice due to the challenge of finding two banks with compatible business models, corporate cultures, markets, and products.
1.4.4 Collection of stocks on the securities market
The acquiring bank will gradually accumulate stocks by trading on the stock market or purchasing shares from existing strategic shareholders This method, while effective, is time-consuming and can significantly increase the target company's share price as the buyer's acquisition intentions become public.
The acquisition of another bank's assets involves purchasing all or part of its assets and transferring ownership, allowing the buyer to select specific assets and some liabilities, which helps mitigate unforeseen debts and streamlines the transaction This method simplifies negotiations by dealing directly with the seller's authorized representative instead of multiple shareholders, unlike share purchases However, this approach can be cumbersome due to the significant time, effort, and costs associated with appraising various properties and preparing the necessary documentation for ownership transfer.
Lessons from the world for Vietnam
1.5.1 JP Morgan Chase – Bank One Corp
JP Morgan Chase is a prominent global financial services firm with assets totaling USD 793 billion and a presence in over 50 countries Renowned for its expertise in investment banking, consumer and business financial services, financial transaction processing, investment management, private banking, and private equity, the firm caters to over 30 million individual customers across the nation, along with many of the world's leading corporate, institutional, and government clients.
Bank One is the nation's sixth-largest bank holding company, with assets of USD
290 billion It currently has more than 51 million credit cards issued, and serves nearly 7 million retail households and more than 20,000 middle market customers
It also manages USD 175 billion of clients' investment assets
According to JP Morgan Chase's financial reports from 2001 and 2002, the treasury and securities services, investment management, and private banking sectors experienced a decline, with the company primarily relying on investment banking and financial services In January 2004, JP Morgan Chase announced a merger with Bank One, creating the second-largest banking franchise in the United States based on core deposits This strategic business combination is projected to result in a financial powerhouse with significant assets.
With a robust capital base of USD 1.1 trillion and over 2,300 branches across seventeen states, the company holds top-tier positions in various sectors, including retail banking, lending, credit cards, investment banking, asset management, private banking, treasury and securities services, middle-market, and private equity The balanced earnings contributions from both retail and wholesale banking position the combined entity for strong and stable financial performance, enhancing shareholder value through a diversified business mix, increased scale, and improved efficiencies and competitiveness.
Executives from JP Morgan Chase and Bank One finalized a stock swap agreement, establishing a ratio where 1.32 shares of JP Morgan Chase common stock would be exchanged tax-free for each share of Bank One common stock This significant USD 58 billion transaction was officially executed in July.
1.5.2 ABN AMRO (Netherlands) – Barclays PLC (Britain)
The merger and acquisition (M&A) between banking giants ABN AMRO and Barclays PLC is celebrated as a landmark event in the history of the banking and financial industry, both in Europe and globally.
ABN AMRO, formed in 1824 from the merger of Algeme Bank Nederland and Amsterdamsche-Rotterdamsche Bank (AMRO), operates 4,500 branches globally However, by 2006, the bank faced significant challenges, reporting a non-performing loan (NPL) ratio of 192% and a yield of only 69.9% In an effort to rescue the struggling institution and create the world's fifth-largest bank, Barclays PLC proposed a takeover, offering €67 billion (USD 91.2 billion) and 3,225 common shares for each ABN share, priced at €36.25 Following the acquisition, the board's composition reflected a 9/10 seat ratio favoring Barclays PLC.
The new bank, headquartered in Amsterdam, aims to serve 47 million customers across 50 countries and is projected to save approximately EUR 3.5 billion by 2010, largely through workforce reductions The restructuring will result in an estimated loss of 23,600 jobs from a total workforce of 217,000, with 12,800 employees facing layoffs and 10,800 positions being relocated to lower-cost regions such as India Additionally, as part of the transaction, ABN will divest Bank of America Corp.'s LaSalle Bank for EUR 21 billion (USD 15.45 billion).
After Barclays, PLC merged with the Royal Bank of Scotland (RBS), along with Stander from Spain and Fortis from Belgium and the Netherlands, the total value of these mergers reached USD 101 billion, establishing them as the largest financier in Europe.
1.5.3 Bank of America – Merill Lynch Bank
In early 2008, Merrill Lynch Bank faced its fifth consecutive quarterly loss, totaling USD 13.5 billion By September of the same year, Bank of America acquired Merrill Lynch for USD 50 billion, marking the end of Merrill's 94 years of independent operation This acquisition positioned Bank of America as one of the world's largest financial institutions, serving 59 million customers across 150 countries and holding USD 2,500 billion in deposits, surpassing competitors like Morgan Chase & Co and Citigroup.
Before its landmark deal with Merrill Lynch, Bank of America engaged in significant M&A activity, acquiring LaSalle Bank Group for $21 billion and MBNA, a well-known credit card issuer, for approximately $34 billion.
In the context of the Federal Reserve System of the United States (FED) struggling to support the United States financial economy during the global financial crisis
2008, Bank of America still seizes 90% of profits from the United States domestic market and continues to affirm its position in the US banking industry
From the world famous M&A deals, there are many issues They can arise before, during and after the deal and that is also a valuable experience for the involved parties
In light of the challenges faced by a Vietnamese joint stock commercial bank, selecting the appropriate M&A strategy emerges as the optimal solution for restructuring various facets of the banking business This approach can effectively enhance capital, reduce costs, expand the business network, and diversify banking products and services, ultimately leading to increased market share.
International experience shows that spontaneous M&A processes can be slow and time-consuming During the 2011-2015 banking system restructuring roadmap and beyond, each bank must clearly outline its long-term development goals and actively pursue joint development opportunities Engaging in M&A is crucial for enhancing competitiveness and facilitating international integration, especially for banks aiming to avoid dissolution or bankruptcy.
Mergers present buyers with intricate challenges, including navigating legal regulations regarding monopolies, addressing taxation and accounting concerns, converting assets, settling unpaid debts, and determining profit-sharing arrangements Additionally, calculating post-merger implications is crucial to enhance the bank's value and attract investors A thorough analysis of these factors is essential, as neglecting them significantly increases the risk of merger failure.
Sub-conclusion
This chapter establishes foundational definitions of the banking system restructuring, commercial banks, and mergers and acquisitions (M&A) within the banking sector It analyzes M&A activities by examining their types, advantages, disadvantages, and implementation methods The researcher includes various global examples of bank M&A to extract valuable lessons for Vietnam This groundwork is essential for the subsequent analysis in the following chapters of the thesis.
THE REALITY OF M&A IN VIETNAM SYSTEMIC BANK
Motivations for bank M&A in Vietnam
Between 2011 and 2015, the banking system underwent significant restructuring, marked by a series of aggressive mergers and acquisitions While each transaction had its unique characteristics, the overarching motivations for these M&A activities stemmed from both subjective and objective factors.
The risk of bad debt is significantly affected by corporations' ability to repay bank loans, particularly as many businesses struggle with high lending interest rates between 20-25% Additionally, credit growth has been limited to under 20%, exacerbating financial difficulties for these companies, as highlighted in the socio-economic report from October.
In the first nine months of 2011, nearly 50,000 enterprises in Vietnam, representing over 10% of the total businesses, went bankrupt or ceased operations Additionally, a wave of black credit defaults amounting to trillions of VND heightened the risk of increasing bad debt for banks.
By June 2011, the bad debt ratio rose to 3.21%, up from 2.16% in 2010, with group 5 representing approximately 47% of the total bad debt During the first half of the year, group 1 debt decreased by 0.19% per month, while average loans in groups 2 to 5 experienced slight increases of 0.04%, 0.02%, and 0.07%, respectively.
Table 2.1: Bad debt ratio of credit institutions in Vietnam Vietnam credit institutions 3.44%
(Source: Orientation and solutions to restructure Vietnam banking system
Table 2.2: Group 2 and group 5 over total outstanding loans in September 2011
In 2011, the banking sector experienced a notable rise in overdue and bad debts, primarily due to aggressive credit growth in previous years coupled with inadequate risk management capabilities Additionally, unfavorable macroeconomic conditions contributed to this issue State-owned commercial banks reported higher non-performing loan (NPL) ratios compared to joint-stock banks, largely attributed to the bad debts stemming from struggling state-owned enterprises and inefficient economic groups.
In 2011, the Vietnamese banking system revealed significant weaknesses, highlighted by a sharp rise in overdue and bad debts amid low credit growth The transition of loans from Group 1 to Group 2 debt indicated a decline in loan quality, raising alarms about the potential for further deterioration Consequently, the worsening credit quality and increased credit risk emerged as critical issues for bank management.
To enhance the competitiveness of Vietnam's commercial banking system and ensure sustainable development, it is essential to strengthen administrative capacity Increasing chartered capital is necessary to meet the capital adequacy ratio (CAR) set by the State Bank of Vietnam (SBV) while maintaining operational efficiency Furthermore, collaborating with foreign banks can provide valuable management experience and technological advancements, enabling commercial banks to better control transactions and ensure safety and stability in the banking sector.
The drive to raise chartered capital has significantly influenced share sales among banks To enhance market integrity and efficiency, the Government has implemented regulations mandating that businesses in banking, insurance, and securities maintain a minimum level of legal capital to operate effectively in the market.
As per Decree 141/2006/ND-CP, by December 31, 2010, licensed credit institutions must maintain a total legal capital equivalent to their required capital levels Joint-stock commercial banks are mandated to have a legal capital of VND 3,000 billion, which is also applicable to central people's credit funds, investment banks, and cooperative banks In contrast, policy banks and development banks are required to have a legal capital of VND 5,000 billion.
The competitiveness driven by economic integration has allowed foreign banks to leverage bilateral and multilateral commitments to penetrate Vietnam's banking market Despite facing legal challenges and capital raising issues, the number of significant foreign banks has grown, posing a challenge to domestic banks due to their experience, advanced technology, and substantial investment capital As Vietnam's banking sector is relatively young, with medium and small banks primarily serving urban areas and lacking adequate internal resources, mergers and acquisitions (M&A) among domestic banks or the acquisition of domestic bank shares by foreign banks have emerged as a promising strategy for both parties to enhance their market presence.
Overview of Vietnam commercial banking M&A
By 2011, Vietnam's banking system comprised 52 commercial banks, 51 foreign bank branches, 31 non-bank credit institutions, one Central People's Credit Fund, 1,083 grassroots credit funds, and one small-scale finance institution Many credit institutions struggled due to insufficient internal resources The State Bank of Vietnam (SBV) emphasized the need for these institutions to devise development strategies and restructuring measures to enhance competitiveness, ensure safe operations, and promote sustainable growth A key restructuring solution identified was mergers and acquisitions (M&A).
Consequently, bank M&A is always one of the most exciting sectors (only after food - in foreign M&A activites, and after financial services - in domestic M&A activities)
Chart 2.1: Vietnam M&A by sector in 2011
(Source: Report of Stockplus Company)
Several Vietnamese banks have successfully conducted share trading with the involvement of foreign investment funds and banks, leading to increased business capital, enhanced governance, and the adoption of advanced technology.
- Vietcombank has sold 15% of the outstanding shares to Mizuho This investment is equivalent to VND 11.8 trillion (USD 567.3 million)
In a significant move, the International Finance Corporation (IFC) acquired a 10% stake in Vietinbank, valued at approximately USD 1.88 million, marking a notable transaction in the foreign investment landscape of Vietnamese banks This investment represented the largest share issuance of 2011 Subsequently, Vietinbank attracted an additional investment of nearly USD 743 million, equivalent to a 20% stake, from Mitsubishi UFJ Tokyo Bank.
- Commonwealth Bank of Australia bought another 25 million shares of VIBbank at VND 45000 per share, thereby increasing the holding ratio from 15% to 20%
IFC has acquired a significant 10% stake in ABBank, while Maybank holds a 20% share of the bank's chartered capital This strategic investment has boosted ABBank's chartered capital from approximately VND 4,200 billion to nearly VND 4,800 billion.
Standard Chartered, Asia Commercial Bank (ACB), HSBC, Techcombank, OCBC, and VPBank are key players in the banking sector, providing a range of financial services and products in the region.
Before Project 254 was introduced, the State Bank of Vietnam (SBV) released Instruction 01/CT-NHNN in 2012, focusing on the effective implementation of monetary policy and the safety of banking operations This instruction classified commercial banks into different categories, assigning specific credit growth rates and limits on corporate bond purchases and trust loans, with rates set at 17%, 15%, 8%, and no credit growth for respective groups.
Group 1 - Banks had a healthy financial status, capacity and scale that was large enough to continue to develop into a viable and competitive regional and international bank
Group 2 banks maintain a stable yet modest financial status, lacking the necessity or conditions for significant growth The State Bank of Vietnam (SBV) will implement regulations to ensure stringent oversight, promoting the effective operation of these financial institutions.
Group 3 - Banks were in dire financial straits needed restructuring The SBV would closely supervise, participate in management and restructure their investments or do M&A if necessary.
Table 2.3: Categorization of Commercial banks
Kien Long Bank LienVietPost Bank MDB
NamA Bank BacA Bank OCB
PG Bank Southern Bank DaiA Bank
Ficombank Habubank TPBank Navibank Westernbank Trust Bank
After that, a series of M&A deals took place They are summarized in the table below:
Table 2.4: M&A deals between Vietnam commercial banks
LienVietPostbank 2011 Vietnam Postal Savings Service
- Saigon Hanoi Bank (SHB) and Hanoi Building Bank (HBB)
Between 2008 and 2010, both banks experienced a significant rise in total assets, followed by modest growth in 2011 This trend can be attributed to the effects of the global financial crisis and the State Bank of Vietnam's measures to limit excessive credit growth in 2010 The asset expansion of the banks prior to their merger was closely linked to their credit and investment activities.
HBB's credit portfolio suffers from poor diversification, primarily consisting of long-term loans vulnerable to macroeconomic shifts, leading to overdue debts during crises A significant loan of VND 2,751.5 billion to Vinashin has severely impacted HBB's liquidity, prompting the State Bank of Vietnam (SBV) to mandate that HBB establish a 100% risk premium on this debt.
Table 2.5: HBB's classification of outstanding loans 2010-2011
Classification of outstanding loans (billion VND)
Group 2 – Debts need special attention
Total outstanding loans (including trust investment)
Including Vinashin’s debt and bonds 17.8 18.9
Till February of 2012, the bank's investment also contributed to the accumulated loss of VND 4,066 billion Facing that situation, HBB was forced to make additional provisions for the list of:
• 10% of the chartered capital in Bianfishco JSC, equivalent to VND 80 billion
• Nearly VND 190 billion on buying forward 34 million shares from Bianfishco's shareholders (which defaulted in 2011)
• VND 270 billion of deposits at Vietnam Rubber Finance Company
• VND 200 billion of deposits at GPbank, First Bank, Song Da Finance and Handico Finance
The rapid growth in property, credit activities, and investments indicated that the bank prioritized quantity over quality Consequently, issues such as bad debt, significant provisioning, and increasing operating expenses led to a decline in profitability, causing HBB's return on equity (ROE) to fall to 5% in 2011.
SHB demonstrated superior asset quality through a diversified credit portfolio across various industries, including agriculture and supporting sectors, which mitigated risks In 2011, the bank achieved a 41% growth in credit relative to total assets, maintaining a low bad debt ratio of 2.23% and a provisioning rate of just 1.22% of outstanding loans Investment activities accounted for 21.77% of total assets, with a well-diversified portfolio comprising 83% of valuable securities, bonds, and long-term investments, totaling VND 4,448 billion This strategy not only ensured bank income and strengthened customer relationships but also prioritized safety Furthermore, SHB upheld liquidity by maintaining deposits at the State Bank of Vietnam and other institutions, representing 25% of total assets.
SHB and HBB exhibited significant differences in capital mobilization and utilization strategies HBB's reliance on individual customer mobilization was notably low, accounting for only 23.66% of its capital structure, with the majority sourced from the inter-bank market, leading to increased mobilization costs In contrast, SHB achieved a capital growth rate of approximately 45% in 2011, supported by a net balance of deposits and loans with other banks amounting to VND 2,936 billion SHB consistently maintained an active approach to mobilizing funds to finance its business operations.
Successfully overcoming the crisis time, SHB used to maintain its quota as regulated by SBV, including 13% SBV's capital adequacy ratio - 9% higher than required by SBV ROE was 15.04% in 2011
On August 28, 2012, HBB officially merged into SHB, resulting in a significant loss of VND 1,829 billion for SHB However, the bank received support from the State Bank of Vietnam (SBV), allowing it to establish provisions for Vinashin loans and bonds over a five-year period, subsequently elevating its status to a group one bank Following the merger, SHB experienced positive growth, with deposit mobilization increasing by 1.9 times and equity rising by 18% By the end of 2016, Vinashin's remaining debt had decreased to approximately VND 950 billion, which still required resolution.
(Source: Financial reports of SHB) Table 2.6: Income and cash flow of SHB 2012-2016
Deposits and loans from credit institutions
Net cash flows from operating activities 2791 4954 13117 5206 -7830
(Source: financial reports of SHB)
Following the merger, SHB has established a robust network of 240 branches and transaction offices across Vietnam, along with two branches in Cambodia and Laos, supported by nearly 5,000 employees This consolidation has positioned SHB as a major financial institution in Vietnam, boasting total assets exceeding VND 120 trillion and a chartered capital of VND 9 trillion The bank has enhanced its product and service offerings, integrating modern technology to improve quality and attract customers, thereby increasing its market competitiveness Notably, SHB's Capital Adequacy Ratio (CAR) post-merger stands at 11.39%, aligning with international standards and ensuring safety and sustainability SHB is dedicated to safeguarding the legal rights of depositors and stakeholders from HBB throughout the merger process The transparency of information shared during the merger has fostered customer trust, resulting in stable cash flow for both HBB and SHB.
SHB prioritized acknowledging the advantages for SHB and HBB shareholders by implementing a share swap, where each shareholder of HBB received 0.75 shares of SHB for every share held.
General assessment
From 2011 to 2015, Vietnam's banking system successfully executed seven mergers and acquisitions (M&A), involving both compulsory and voluntary transactions This process included the participation of 16 commercial banks, resulting in a reduction of 10 banks and leaving a total of 20 commercial banks operating in the country These mergers have significantly impacted the scale and branch network of the banking sector in Vietnam.
The MSB MDB network demonstrates an undeniable strength in the banking system, contributing to overall market stability It presents significant growth opportunities through its extensive scale, total assets, and chartered capital Additionally, the bank's expansive branch network, diverse customer base, varied product offerings, and skilled human resources further enhance its competitive position in the financial landscape.
Prior to Project 254, the total assets of credit institutions amounted to VND 4,993.9 trillion, with outstanding loans reaching VND 2,631.2 trillion and mobilized capital totaling VND 4,294.2 trillion Additionally, the contributed capital for share purchases was valued at VND 55.6 trillion.
By 2014, the financial figures had risen significantly, reaching VND 6,514.9 trillion, VND 3,667.2 trillion, VND 5,758.8 trillion, and VND 62.8 trillion, respectively Furthermore, the non-performing loan (NPL) ratio showed a positive trend, decreasing from 4.08% in 2012 to 3.25% in 2014, and further declining to 2.5%.
2015 VND 231.5 trillion of bad debts was processed in 2 years 2013 and 2014, confirming the efforts of the credit institutions system and VAMC in dealing with bad debts
The banking system's liquidity remains stable, with improved solvency indicators for credit institutions The capital adequacy ratio consistently exceeds the legal minimum of 9% Although credit growth has slowed to a reasonable pace, mobilized capital continues to rise significantly, leading to a decline in the credit extension versus mobilization rate Most credit institutions now meet the required solvency ratios, and foreign currency risk has notably decreased, with the ratio of foreign currency credit to total outstanding loans remaining stable and low.
Credit institutions are actively enhancing their networks to fully leverage market opportunities, driven by improved performance indicators Banks are strategically reviewing their investment portfolios to divest from low-yield or high-risk assets while capitalizing on profitable investments Additionally, state credit institutions are focusing on modernizing their risk management systems and enhancing internal inspection and control efficiency Reports from the State Audit indicate that each institution has established regulations for inspection and supervision, incorporating both remote and direct assessments, along with a structured annual inspection schedule that includes both large-scale and periodic checks The quality of inspection recommendations has significantly improved, and credit institutions have also developed a robust security infrastructure to ensure stable and seamless operations.
Despite the successful completion of some bank mergers, many deals remain unresolved, such as the case of VietinBank and PGBank On April 14, 2015, shareholders from both banks approved their merger, anticipated to finalize by the third quarter of 2015 However, two years later, the merger has yet to progress The State Bank of Vietnam (SBV) has requested VietinBank to reassess and update PGBank's valuation and renegotiate the swap ratio, initially set at 1:0.9 This ratio has raised concerns among shareholders, particularly state shareholders, due to its perceived unfairness Despite these challenges, experts still advocate for VietinBank to proceed with the merger actively.
PGBank to take advantage of PGBank's network, opportunities to cross-sell products and services, boost retail banking, increase customer base and etc
Vietnam's banking sector faces several limitations in mergers and acquisitions (M&A), primarily due to the low financial capacity of domestic commercial banks compared to international counterparts, which hampers competitiveness Additionally, the absence of a reporting system aligned with international accounting standards leads to inaccurate and subjective performance assessments While there have been improvements, many banks still lack diverse product offerings and utilize outdated technology Furthermore, the accessibility of banking products and services remains inadequate for rural populations, resulting in a limited engagement in economic transactions through banks.
The decline in human resource quality and management capacity negatively impacts the banking sector, which prioritizes short-term gains over sustainable development and long-term objectives This approach leads to challenges not only for individual banks but also for the entire financial system, particularly during unfavorable economic conditions.
Sub-conclusion
This chapter highlights bank mergers and acquisitions (M&A) as a strategic approach to effectively restructure Vietnam's banking system during the 2011-2015 period A robust and sustainable banking system is essential for enhancing competitiveness both regionally and globally.
M&A deals among domestic and foreign banks in Vietnam have been driven by both compulsory and voluntary motivations Over nearly five years of implementing the first phase of the 254 project, significant achievements have been made in the restructuring of the banking system, particularly in M&A activities However, several constraints persist, prompting the researcher to propose solutions aligned with Vietnam's development orientation through 2020 in the subsequent chapter.
SOLUTIONS AND RECOMMENDATIONS
Outlook for Vietnam commercial banking
3.1.1 Restructuring orientation for the period from 2016-2020
Project 254 aims to fundamentally restructure the credit institution system, focusing on creating a versatile, modern, safe, efficient, and sustainable framework for credit institutions.
From 2011 to 2015, Vietnam's banking system underwent significant restructuring to enhance its foundations, leading to a diverse array of ownership structures, scales, and types by 2020 This evolution was driven by advanced banking management technologies that align with international standards, aimed at better meeting the economy's demand for banking and financial services As Vietnam progresses into the 2016-2020 period, it is crucial to maintain the momentum of previous initiatives while focusing on the sustainable development and gradual improvement of the banking system.
The State Bank of Vietnam (SBV) must continue to assess and address weak credit institutions decisively to stabilize the financial system Additionally, it is essential to develop effective supervision and management mechanisms for restructuring commercial banks, aimed at minimizing losses and costs associated with risks in the credit institution system Notably, Resolution No 25/2016/AH14 outlines a national financial plan for 2016-2020 that does not necessitate the use of the state budget for managing bad debts of state-owned commercial banks or for increasing charter capital in commercial credit institutions, nor for purchasing shares in international financial entities.
Next, commercial banks gradually standardize their banks' safety standards in line with international standards In the roadmap to restructure the banking system in
In Vietnam, commercial banks are mandated to adhere to the Basel II standards, with expectations that 10 to 12 banks will successfully implement these requirements Furthermore, it is anticipated that 1 to 2 of these banks will reach sizes and capabilities comparable to regional counterparts, facilitating gradual compliance with international economic integration standards.
Bank restructuring focuses on enhancing the core functions of capital mobilization and credit provision, which are essential for maintaining public confidence and reducing liquidity risk To achieve this, credit institutions must prioritize transparency in their financial status, improve operational quality, and adhere to safety criteria Commercial banks play a crucial role in stabilizing the macro economy and facilitating economic growth by addressing challenges faced by manufacturing and businesses Between 2016 and 2020, the State Bank of Vietnam (SBV) is working on a plan to restructure credit institutions while managing non-performing loans (NPLs), keeping the NPL ratio under 3%, primarily through state-owned banks The Vietnam Asset Management Company (VAMC) will enhance its effectiveness in managing bad debts, while the SBV plans to implement stricter regulations on collateral management to mitigate the emergence of new bad debts and improve overall credit quality.
The legal framework for managing bad debts and restructuring credit institutions will become more defined, particularly regarding the ownership of shares in commercial banks This aims to prevent the misuse of borrowed funds in cross-investment scenarios, requiring shareholders to demonstrate their legal capital contributions The SBV governor has indicated that any violations will result in a permanent ban from banking management.
Between 2016 and 2020, the trend of mergers and acquisitions (M&A) in the banking sector is expected to persist, as banks aim to enhance their value beyond individual operations Following the stabilization of the banking system, the State Bank of Vietnam (SBV) will have a reduced influence on M&A transactions compared to its previous interventions with struggling banks Consequently, commercial banks will proactively pursue M&A opportunities based on market dynamics, driven by several factors that support this trend.
As the integrated economy evolves, mergers and acquisitions (M&A) are essential for commercial banks to address growing demands Despite aggressive efforts to increase chartered capital, banks still face challenges in meeting regional and global development needs M&A activities, particularly among small joint-stock commercial banks, aim to enhance economic scale benefits Additionally, these transactions enable banks to save time, access new markets, and acquire skilled human resources and advanced technology In an increasingly competitive regional and global landscape, M&A not only reduces market competition by consolidating rivals but also strengthens the competitiveness of banks post-merger.
The completion of the legal framework has streamlined the process of conducting mergers and acquisitions (M&A) deals Key regulations, including corporate, investment, competition, securities, and credit institution laws, alongside Circular No 04/2010/TT-NHNN issued by the State Bank of Vietnam (SBV), govern the merger, consolidation, and acquisition of credit institutions Moving forward, legal documents related to banking, especially concerning banking M&A, will continue to be refined and updated The SBV, as the state management authority, will review and support these M&A transactions.
Based on the development strategy and the characteristics of each bank and market, each commercial bank has its own M & A approach
The merger and acquisition (M&A) of banks, particularly the combination of similar-sized institutions or large banks with smaller ones, is likely to increase in frequency Such mergers leverage the strengths of both parties, enhancing product offerings and customer bases, and ultimately forming a new bank with significant growth potential and market dominance Additionally, large banks engage in M&A with smaller banks to access niche markets and capitalize on overlooked opportunities, especially in competitive environments This strategy not only boosts market presence but also strengthens the overall resilience of the newly formed institution through the superior management capabilities of larger banks.
Trade liberalization in the banking sector will be enhanced through the integration factor, as the government aims to strengthen this process by gradually decreasing its protective measures This includes a strategic reduction of state ownership and capital in various banks.
The Vietnamese market has become a magnet for global investors, particularly from the banking and finance sectors, who are acquiring local banks as a strategic entry point Simultaneously, many Vietnamese banks are seizing opportunities in emerging markets to boost their competitive edge and drive growth.
Banks, insurance companies, and securities firms are increasingly engaging in mergers and acquisitions (M&A) to create comprehensive financial and banking groups This consolidation enhances cash flow activities and allows for the development of complementary products, resulting in optimized offerings that reduce risks for both customers and service providers The evolving relationship between banks and service providers highlights a growing trend, with many potential banks actively hiring and integrating card services with international payment solutions However, the future may see this relationship transformed or even eliminated through M&A activities, reflecting the competitive shift from traditional banking to a broader financial-banking market.
Recommendations
3.2.1 For the State Bank and other authorities
- Completing the legal system for M&A activities
Vietnam's banking system has experienced significant growth, followed by a series of scandals that prompted mergers and acquisitions (M&A) to mitigate the risk of systemic collapse This situation has tested the country's legal framework and its capacity to address stakeholder concerns While many issues have been resolved, persistent loopholes and challenges in the legal system have been identified To foster a fair business environment and promote healthy competition, the government must refine the legal provisions governing M&A activities within the Credit Institutions Law and provide clear guidance through circulars Additionally, the State Bank of Vietnam (SBV) should streamline overlapping legal documents by standardizing definitions, concepts, and conditions while clearly outlining the regulatory scope.
Mergers and acquisitions (M&A) represent a significant economic concentration that influences market demand and supply, impacting market fairness The State Bank of Vietnam (SBV) and relevant authorities face the challenge of fostering competition while eliminating restrictive practices To address this, legal frameworks must clearly define competitive activities and explicitly identify prohibited economic concentrations Additionally, government authorities should revise laws to align with evolving economic relationships and international commitments, including those under the ASEAN Economic Community (AEC), World Trade Organization (WTO), and Asia-Pacific Economic Cooperation (APEC).
The stability of Vietnam's banking system presents an opportunity to actively attract foreign capital by increasing foreign investor shareholding limits in domestic banks Currently, Decree No 01/2014/ND-CP permits foreign strategic investors to own up to 20% of a bank's chartered capital, with individual ownership capped at 5% and total foreign ownership limited to 30% To mitigate risks and foster bank development through foreign investment, authorities should consider raising these ceilings Although struggling banks like Oceanbank and GPbank have been allowed to accept 100% foreign capital, they still face significant legal challenges that hinder their success.
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
The State Bank of Vietnam (SBV) should adopt a proactive approach by conducting a comprehensive assessment of the banking market to gain insights into the current M&A trends This will help ensure that the number of commercial banks aligns with the actual economic and social needs The focus should be on addressing the challenges posed by weak banks, as they are a significant issue that undermines the restructuring goals of the banking system To achieve this, the SBV must take decisive action against underperforming credit institutions that do not comply with safety regulations and strictly enforce monetary laws and banking management standards.
- Early establishing the M&A market in Vietnam
Mergers and acquisitions (M&A) are crucial for enhancing the financial strength of credit institutions, as they facilitate the transfer of investment value between organizations, leading to more efficient operations While M&A may reduce the number of market players, it effectively aligns supply and demand, making it essential to approach this market with professionalism, particularly within the banking sector Ensuring various critical factors are in place is vital for the success of M&A activities.
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
To enhance participation in the M&A market and ensure successful transactions, it is essential to simplify legal procedures while safeguarding the interests of all parties involved Increasing the number of businesses in this market will lead to higher trading volumes Furthermore, establishing clear asset valuation standards will provide investors with a comprehensive understanding of the target bank's structure It is crucial to eliminate practices that manipulate prices to undervalue banks for the benefit of profiteers.
To enhance transparency in banking operations, a robust information control system must be developed, particularly for M&A activities where details about brands, markets, customer segments, and management are crucial for mitigating risks for both buyers and sellers Many banks recognize the significance of timely information in attracting investors and fostering customer trust, which is reflected in their regular updates on websites The State Bank of Vietnam (SBV) should take the lead in establishing a comprehensive information system for monitoring, aggregating, and reporting bank status To ensure the quality of collected information aligns with integration trends, the SBV must mandate that commercial banks standardize their financial statements according to international accounting and auditing standards.
To effectively manage its banking system, the State Bank of Vietnam (SBV) established an agency dedicated to M&A advisory services This consulting firm acts as an intermediary between acquiring and target banks, facilitating essential tasks such as legal documentation, strategic advice, bank selection, and price negotiation, which are crucial for the success of M&A transactions As market demands evolve, private organizations specializing in M&A consultancy for Vietnamese commercial banks are emerging Until then, the SBV will oversee the quality and operations of these consulting firms to ensure effective practices in the industry.
Banks must enhance their chartered capital to showcase their financial strength while maintaining the safety of their operations It is crucial for banks to strategically time and select methods for raising capital, ensuring transparency in their operational data and business performance to optimize capital acquisition from the market.
For small or struggling banks, self-financing poses significant challenges, consuming substantial time and resources To enhance their capital and financial strength, these banks should consider merging with larger institutions, as this approach is often more viable than facing bankruptcy due to a lack of competitiveness or operational inefficiencies However, the pursuit of mergers and acquisitions (M&A) may be thwarted if potential partner banks opt for alternative capital-raising strategies In contrast, well-performing commercial banks with adequate capital can increase their chartered capital by issuing additional shares or expedite their entry into the stock market if they are not already listed.
To maintain client loyalty and investor trust, commercial banks must deliver clear and comprehensive information throughout the capital raising or M&A process.
In addition to capital size, banks must prioritize effective bad debt management, loan issuance, and capital mobilization Competitive pressures have led banks to engage in interest rate wars, relax credit requirements, and neglect bad debt provisions to meet profit targets This mismanagement can result in severe consequences, such as plummeting stock prices and mass withdrawals To prevent a recurrence of high bad debt ratios, commercial banks must adhere to the prudent provisioning principles set by the State Bank of Vietnam (SBV) Regular review and classification of debts are essential, along with close collaboration with debtors to ensure loan affordability and support during initial challenges Additionally, banks should work closely with the Vietnam Asset Management Company (VAMC) to effectively address and resolve bad debt issues.
To enhance capital mobilization, commercial banks should effectively segment their markets to prioritize customer care, resource management, cost reduction, and business efficiency Investing in market research is essential for understanding customer needs and offering tailored products and services that attract capital Additionally, banks must exercise caution when evaluating credit projects, including securities lending, real estate, and manufacturing To improve customer experience, it is crucial for commercial banks to streamline their appraisal and lending procedures, ensuring they are efficient and time-saving.
The brand of a bank is a crucial intangible asset that enhances its value and differentiates it from competitors, particularly during mergers and acquisitions (M&A) Rebuilding a bank's brand through M&A presents an opportunity to align the brand values of both the target and acquiring banks By focusing on improving service attitudes, providing transparent banking information, and ensuring efficient transactions, banks can strengthen their positive attributes while addressing weaknesses To achieve this, it is essential for banks to thoroughly understand the cultural dynamics of their customer base and market, enabling effective public relations and communication strategies.
- Attaching special importance to the development of quality human resources
Bank mergers and acquisitions (M&A) inevitably lead to shifts in workforce dynamics, with employees moving between banks and across the banking sector Effective human resources management plays a crucial role in mitigating brain drain, enabling banks to retain talent while also fostering the growth and accumulation of skilled labor.
Sub-conclusion
This chapter outlines the strategic directions for banking restructuring from 2016 to 2020 and anticipates the emerging trends in bank mergers and acquisitions (M&A) amid extensive economic integration Building on the restructuring efforts of the past and future plans, various solutions are proposed to address the challenges identified earlier, aiming to enhance the strengths of the banking system in Vietnam and create new opportunities specifically within the banking M&A sector.
Recapitulations and concluding remarks
The State Bank of Vietnam (SBV) has highlighted that mergers and acquisitions (M&A) are essential for enhancing bank competitiveness as part of its strategy to restructure the banking system and address bad debts M&A offers significant advantages, including increased bank size, enhanced brand value, cost reduction, and expanded distribution networks This flexibility allows for M&A activities between banks of similar sizes or between larger and smaller banks, benefiting all parties involved.
The SBV is prepared to offer technical assistance to banks pursuing mergers and acquisitions, supporting both the interests of participating banks and the overall banking system.
Recent bank mergers and acquisitions (M&A) have positively influenced the banking sector by addressing the challenges faced by weaker banks and enhancing the overall stability of the system However, it remains premature to assess the effectiveness of these banks post-M&A, as they require time to stabilize and optimize resources from the acquired institutions Additionally, several M&A transactions are still pending, necessitating intervention from the State Bank of Vietnam (SBV) to resolve any conflicts of interest among involved parties.
As the economy evolves and integrates, the operations of commercial banks and M&A activities must be closely monitored and regulated by the State Bank of Vietnam (SBV) in collaboration with other authorities It is essential to thoroughly analyze and test sanctions to progressively reach the desired objectives.
Implications
Banking plays a crucial role in a nation's economic activities, and Vietnam is reforming its banking system through mergers and acquisitions (M&A) to achieve sustainable, market-oriented growth and comprehensive integration The textile, garment, retail, and fast-moving consumer goods industries are poised for significant growth as a result of these M&A deals Concurrently, the Vietnamese government is gradually equitizing state-owned enterprises and actively seeking to attract foreign investment While enhancing regional and global competitiveness, the government is also committed to maintaining core safety standards to mitigate internal and external fluctuations.
Limitations and proposals for further study
M&A activities have gained global popularity, yet bank M&A in Vietnam is still in its early stages, influenced by subjective factors and an underdeveloped market mechanism Throughout the thesis research, the author incorporated insights from various sources, including books, reports, and previous studies, while recognizing inherent limitations The researcher welcomes feedback from educators and interested parties to enhance the development of this topic.
1 Claudia Dziobek & Ceyla Pazarbasioglu 1998 Lessons from Systemic Bank Restructuring International Monetary Fund
2 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
3 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
4 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
5 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
6 Waxman, Margery 1998 A legal framework for systemic bank restructuring Washington, DC: World Bank
1 Circular 04/2010/TT-NHNN (2010), The State Bank of Vietnam
2 Decision 369/QĐ-TTg (2013), The Government of Vietnam
3 Decision No.254/QĐ-TTg (2012), The Prime Minister of Vietnam
4 Decree 141/2006/ND-CP (2006), The Government of Vietnam
5 Decree No 01/2014/ND-CP (2014), The Government of Vietnam
6 Instruction 01/CT-NHNN (2017), The State Bank of Vietnam
7 Law on Competition (2004), The National Assembly of Vietnam
8 Law on Credit Institution (2010), The National Assembly of Vietnam