The total charter capital of the country's 12 smallest commercial banks by the end of the second quarter was worth only 37.694 trillion VND (1.675 billion USD). That is just 460 billion VND (20.4 million USD) higher than that of Vietinbank, which currently retains its top position with a charter capital of 37.234 trillion VND (1.65 billion USD). Vietinbank is also trying to raise capital to 49 trillion VND (2.17 billion USD) by the end of this year. According to the latest financial reports from 34 commercial banks, some changes in their charter capital were reported after the banking industry underwent restructuring these past five years. Thanks to a merger with MHB in May this year, BIDV follows Vietinbank with a charter capital of 31.481 trillion VND (1.399 billion USD). Previously, BIDV's charter capital was much lower than that of the leading Vietinbank. The report shows that the 34 banks currently can be classified into three groups: the first group including 9 banks with a charter capital of more than 10 trillion VND (444.44 million USD) each, the second group including nine banks with a charter capital of 5-10 trillion VND (222.22-444.44 million USD) each, and the third group has a charter capital of less than 5 trillion VND (222.22 million USD) each. In the third group, nine banks have charter capital hovering around 3 trillion VND (133.33 million USD) each. These are BaoVietBank, KienLongBank, NamABank, PGBank, VietcapitalBank, CBBank, NCB, GP. Bank and NamABank. The deputy director of a small bank, who declined to be named, admitted that it was now difficult for small banks to compete against larger banks in capital mobilisation due to their brand image. "Most depositors think that small banks are weak, and therefore such banks face challenges in capital mobilisation," he said. Banking expert Nguyen Tri Hieu said small banks had adopted the same business strategies as larger banks, and were at a disadvantage while competing against the latter. This has made many small but good banks, especially the ones that have no specific business strategy, draw up plans for mergers with other banks to become large banks. Financial experts said the trend was picking up. Under the M&A trend, the number of banks in Vietnam would reduce, Hieu said, adding that the number of banks should be reduced by 19 to touch roughly 15 banks in the future. He said a fall in the number of banks would help enhance their health and strength by increasing ownership capital, making performance more effective, and help to manage non-performing loans better. If they are not opting for M&A, small banks are trying to raise capital to become larger banks. Statistics show about 12 banks have so far planned to increase their charter capital this year, of which VP Bank and Bac A Bank successfully increased the capital to 8.056 trillion VND (358.04 million USD) and 4.4 trillion VND (195.55 million USD), respectively. MB Bank is also expected to raise its charter capital to 16 trillion VND (711.11 million USD) in the next few weeks. If the plan is successful, MB Bank will surpass Sacombank to rank fifth in terms of charter capital. Some small banks such as VietABank and NamA-Bank have also planned to increase their charter capital to 4.2 trillion VND (186.66 million USD) and 4 trillion VND (177.77 million USD) from the current 3.098 trillion VND (137.68 million USD) and 3.021 trillion VND (134.26 million USD), respectively.-VNA