Small-sized banks with no specific business strategy are consideringmergers, as recent consolidation in the banking sector has made itdifficult for them to compete with larger banks.
The recentmergers and acquisitions wave in the banking sector has created largerbanks and reordered the banking system, posing difficulties for smallerbanks in competing against many larger rivals.
According to thedirector of a small bank, who declined to be named, it is now difficultfor small banks to compete against larger banks in capital mobilisationdue to their brand image.
Most depositors think that small banks are weak, and therefore such banks face challenges in capital mobilisation.
Thishas made many small banks, including ABBank, DongABank, NamABank andVietABank, draw up plans for a merger with another bank in the next fewyears, the Dien dan Dau tu (Investment Forum) newspaper reported.
Financialexperts say the trend of a small bank, especially one having nospecific business strategy, merging with another to become bigger ispicking up, the newspaper said.
Nguyen Xuan Thanh, Director ofthe Fulbright Economics Teaching Programme in HCM City, said small bankshad adopted the same business strategies as larger banks so that theywere not at a disadvantage in competing against the latter.
It iseasier for small banks to find a partner for merger when no specificbusiness strategy is involved, than find a partner with a specificbusiness strategy, according to Thanh.
This is the reason the banking sector has seen many small but good banks look for partners for merger.
EchoingThanh's views, banking expert Nguyen Tri Hieu said small banks which asof now have no specific business strategy would find it difficult tocompete against larger banks.
Most small banks were focusing onbecoming leading retail banks with competitive interest rates, astrategy similar to that of large banks, Hieu said.
"Such a strategy, however, is advantageous for large banks, not small ones," he said.
"Therefore, small banks cannot survive unless they adopt specific business strategies or merge with another bank," Hieu said.-VNA
The recentmergers and acquisitions wave in the banking sector has created largerbanks and reordered the banking system, posing difficulties for smallerbanks in competing against many larger rivals.
According to thedirector of a small bank, who declined to be named, it is now difficultfor small banks to compete against larger banks in capital mobilisationdue to their brand image.
Most depositors think that small banks are weak, and therefore such banks face challenges in capital mobilisation.
Thishas made many small banks, including ABBank, DongABank, NamABank andVietABank, draw up plans for a merger with another bank in the next fewyears, the Dien dan Dau tu (Investment Forum) newspaper reported.
Financialexperts say the trend of a small bank, especially one having nospecific business strategy, merging with another to become bigger ispicking up, the newspaper said.
Nguyen Xuan Thanh, Director ofthe Fulbright Economics Teaching Programme in HCM City, said small bankshad adopted the same business strategies as larger banks so that theywere not at a disadvantage in competing against the latter.
It iseasier for small banks to find a partner for merger when no specificbusiness strategy is involved, than find a partner with a specificbusiness strategy, according to Thanh.
This is the reason the banking sector has seen many small but good banks look for partners for merger.
EchoingThanh's views, banking expert Nguyen Tri Hieu said small banks which asof now have no specific business strategy would find it difficult tocompete against larger banks.
Most small banks were focusing onbecoming leading retail banks with competitive interest rates, astrategy similar to that of large banks, Hieu said.
"Such a strategy, however, is advantageous for large banks, not small ones," he said.
"Therefore, small banks cannot survive unless they adopt specific business strategies or merge with another bank," Hieu said.-VNA
