The financial sector in Vietnam is undergoing a shift in mergers and acquisitions (M&A), moving away from traditional deals to focus on the mandatory transfers of struggling banks and strategic exits from fintech ventures. Experts are urging insurers to play a more prominent role in this restructuring process.
MB Bank’s Strategic Divestment
On April 15, 2025, MB Bank made a surprising announcement during its Annual General Meeting (AGM). The bank revealed its intention to adjust its capital, acquire, or divest from its affiliated entities, leading to the decision to separate from its consumer finance arm, Mcredit.
This move marks a significant step in MB Bank’s portfolio restructuring strategy. “MB’s decision to divest from Mcredit is part of a broader trend where banks focus on their core businesses and optimize their operations,” said an analyst. By shedding non-core subsidiaries, such as consumer finance companies, banks can free up capital and improve liquidity. This allows them to concentrate on vital areas like lending, retail banking, and digital services.
MSB Follows Suit
Similarly, MSB Bank is considering divesting its stake in TNEX Finance, formerly FCCOM. The bank plans to present this proposal at its AGM on April 21, 2025. According to MSB CEO Nguyen Hoang Linh, the bank may either seek a strategic partner for a partial divestment or fully exit to refocus on its core banking operations.
The process of selling off TNEX Finance has been delayed several times. A previous attempt to sell part of TNEX Finance to a foreign partner collapsed due to a change in the partner’s strategy. However, MSB remains open to investor participation and is working with McKinsey to explore new business models.
M&A Activity in Vietnam’s Financial Sector
Nguyen Cong Ai, Deputy CEO of KPMG Vietnam, noted that the financial sector remains highly active in M&A activities. However, he pointed out that banking-related transactions are now more selective, as banks carefully choose their partners and foreign investors restructure their portfolios amidst global capital shifts.
“Vietnam’s macroeconomic stability and growth momentum are attracting increased attention from global financial institutions,” said Ai. This growing interest could lead to more M&A activity, especially as banks adapt to a changing economic environment.
SeABank’s Expansion Plans
On April 25, SeABank is set to announce plans to acquire shares in Asean Securities, marking another significant move in the sector. This acquisition aims to broaden SeABank’s business scope, diversify its product offerings, and strengthen its retail banking channels. By expanding its reach, SeABank hopes to create new income streams and optimize shareholder capital.
Government-Driven Bank Restructuring
One of the most notable developments in Vietnam’s banking sector this year is the government’s approval of mandatory transfers of struggling banks. These measures are part of a larger restructuring plan aimed at stabilizing and improving underperforming institutions.
Earlier this year, GPBank was transferred to VPBank, and DongA Bank was absorbed by HDBank. SCB is currently under special supervision, with no official resolution in place.
The Role of Insurers in Bank Restructuring
Dr. Nguyen Tri Hieu, Director of the Global Research Institute for Financial and Real Estate Markets, emphasized that insurance companies should play a more significant role in Vietnam’s banking supervision and restructuring processes. Drawing from the experience of the United States, Hieu pointed out that banks in the U.S. undergo mergers and restructurings under the oversight of federal and state regulators, including the Federal Deposit Insurance Corporation (FDIC). The FDIC reviews banks’ capital adequacy, governance, and profitability.
“In Vietnam, insurance companies are not involved in the inspection or restructuring of banks. However, in the U.S., the FDIC plays a critical role in supervising banks and compensating depositors in times of crisis,” said Hieu.
Conclusion
The financial sector in Vietnam is navigating a new era of M&A and restructuring, with strategic moves aimed at enhancing operational efficiency and focusing on core businesses. Banks are increasingly divesting from non-core assets, while the government continues to drive the restructuring of weak banks. As the sector evolves, the role of insurers in overseeing these processes may become more critical in ensuring the stability of the financial system.
Related Topics:
Japan’s Chugoku Bank Sees Improving Profitability: Moody’s
