HCM City (VNA) - Shareholders of the Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) have approved a plan to acquire the Hanoi-based Petrolimex Group Commercial Joint Stock Bank in an all-stock deal.

At the HDBank annual general meeting held on April 21 they approved taking over PG bank by paying 0.621 share for every share of PGBank.

They also approved a strategic cooperation programme with the State-owned Vietnam National Petroleum Group (Petrolimex) to exploit the advantages offered by the country’s biggest petroleum retailer. 

Shareholders of PG Bank also agreed to the takeover by HDBank at its annual general meeting on the same day. The bank has already wrapped up the formalities.

Following the takeover, HDBank will have a charter capital of 12.81 trillion VND (564.32 million USD).

It will have 15,371 employees, 73 branches and 235 transaction offices.

PGBank had a small capital base, which made it difficult to meet borrowers’ increasing credit needs.

The acquisition by HDBank is an effective outcome for PG Bank since its biggest shareholder, Petrolimex, has had to draw up a roadmap for reducing its ownership of the lender.

HDBank was responding to the Government’s appeal to participate in the banking sector restructure to help consolidate weak banks.

The acquisition will help it develop its retail segment, thus diversifying its products and easing its reliance on credit growth.

The two banks will be able to expand their scale of operations, particularly in the lucrative retail segment thanks to their large combined retail network, and also their financial resources, thus developing and improving the quality of their existing products and services.

The HDBank shareholders meeting also saw the tabling of a report on its record high profit in 2017, which made it one of the most profitable lenders in the country.

The bank’s pre-tax profit surged by 110.6 percent to 1.282 trillion VND (51.9 million USD).

For the past five years HDBank has been reporting high profits following its acquisition of DaiABank and Société Générale Viet Finance (SGVF) a few years ago,  listing on the stock market and strategic sales of its stocks to foreign investors early this year.

Its assets at the end of 2017 were up 26 percent to 189.334 trillion VND.

Its non-performing loans were down to 1.51 percent.

It had deposits of more than 100 trillion VND, up 27 percent from 2016, and credit growth was 17 percent.

Based on the solid performance, the bank is set to pay dividends of 35 percent, 15 percent in cash and 20 percent in the form of stocks, for 2017.

In 2018 HDBank targets increasing its assets to 242.865 trillion VND and pre-tax profits to 3.921 trillion VND, up 62.2 percent.

It expects to keep bad debts under 2 percent.- VNA