Hanoi (VNA) – Right from thebeginning of 2023, many banks have announced their plans for merge andacquisition (M&A) deals and capital increase.

Last week, the Board of Directors of the VietnamNational Petroleum Group (Petrolimex) approved a plan to divest capital from PGBank, which means the bank will have a chance to seek a new strategicshareholder to increase its capital after 12 years.

Earlier in January, the Sumitomo Mitsui Banking Corporation (SMBC)was likely to complete capital divestment from Eximbank. Meanwhile, VPBank isworking to sell 15% of its stake to a foreign partner. Once the deal finishes, itwill be one of the banks with largest equity in the system.

In a directive issued earlier this year,the State Bank of Vietnam (SBV) no longer banned banks from paying cashdividends. Accordingly, this year, many banks are preparing to pay cash dividendssuch as VPBank, TPBank, VIB and ACB.

In its Directive 01/CT-NHNN, the SBV alsoencouraged banks to pay cash dividends in shares to increase charter capital,improve financial capacity and credit supply to the economy, and stabilisemarket interest rates.

Currently, VPBank is leading the system interms of charter capital with over 67 trillion VND (2.84 billion USD). However,the ranking is likely to change with many new records to be set after thecapital-raising race this year.

VPBank’s first rival will be Vietcombank, which plans toissue over 2.7 billion shares to increase its charter capital to 75 trillion VND(3.2 billion USD), becoming the leader in Vietnam's banking industry in termsof chartered capital.

In recent years, Vietnamese commercialbanks have actively increased their capital and improved their financialcapacity, but compared to their peers in the region, the capital buffer ofVietnamese banks is still thin. On the other hand, while countries in theregion have applied Basel 3 or a part of Basel 3 standards, Vietnam has justmet Basel 2 standards.

According to experts, the upcoming increasein charter capital is crucial for banks in developing healthily, expandingbusiness activities, and increasing resilience in a volatile economy.

Chairman of BIDV's Board of Directors PhanDuc Tu said that by the fourth quarter of 2022, the capital adequacy ratio(CAR) of the Big 4 group was only 9.04%, while that of the joint stockcommercial banks was 12.92%. This level is very low compared to other countriesin the region, he said, citing the ratio of the Philippines was 16.29%;Singapore 17.2%; Malaysia 18.3%; Thailand 19.3%; and Indonesia 23.3%)./.