Thailand-based Siam Commercial Bank (SCB) is planning to take over Vietnam’s Vinasiam Bank that will help the former set up a wholly owned branch in the country.
Vinasiam Bank is a joint venture between SCB, the Vietnam Bank for Agriculture and Rural Development (Agribank) and Thai conglomerate Charoen Pokphand Group.
While Agribank owns 34% stake in Vinasiam, the other two stakeholders own 33% shares each.
The Vinasiam Bank that was granted a licence in 1995 has been running in loss over the past three years. Deal Street Asia reported that the bank recorded maximum loss of $7.14m last year.
Speaking about the struggling bank, the State Bank of Vietnam said: "Vinasiam Bank is an utterly weak bank in operation, which cannot assure the real value of regulated capital for a commercial bank. With the SCB acquiring Vinasiam Bank, a troubled lender in the local banking system will be dispatched."
SCB will be the latest in a series of Thai financial institutions to show interest in Vietnam. The country is attracting new players owing to its stable economic growth and increasing commercial integration. Recently, Kasikorn Bank became the first Thai bank to open its offices in the country.
Kasikorn Bank CEO Preedee Dawchai was quoted as saying: "Vietnam, with its abundant human capital, is a vital destination to both Thai and international investors.
"The launch of our two offices in the country means to reinforce our customers’ flexibility in business as they want to expand into Vietnam."