Maritime Bank shareholders reject merger plan

Shareholders in Vietnam’s Maritime Bank (MSB) have rejected the bank’s plan to merge with a local credit institution.

Only 56% of the votes supported the bank's merger proposal, while approval will need 65% as prescribed in its charter.

In its merger plan submitted to the annual general shareholders' meeting on Friday, the board of directors said MSB intends to merge with a commercial bank that operates normally in Vietnam and meets its criteria in terms of total assets, equity and credit quality.

“The aim is to take advantage of the merged bank’s network, personnel, and professional activities to increase MSB’s operational scale and implement the bank’s digitalization strategy,” the board argued.

According to MSB general director Nguyen Hoang Linh, the bank previously merged successfully with the Mekong Development Commercial Joint Stock Bank (MDB). The board will make thorough considerations so that MSB’s operations are not heavily affected by debt settlements and business results at the chosen bank.

“This is just an option for shareholders to look at and many issues will be considered carefully before an official plan is available,” he said.

Vice chairman Nguyen Hoang An said the board itself is not clear about the merger plan, so it was asking for shareholders' opinions. The plan would also need to receive the State Bank of Vietnam’s approval.

“This is just a proposal and shareholders have the right to decide on this matter,” he said, adding that the plan is in line with the central bank’s policy to restructure the credit institution system.

At the meeting, the board said the bank is not planning to pay dividends or bonus shares this year as it wants to keep its current equity and charter capital to create a solid buffer amid the volatile stock market and negative influence from interest rate trends.

The bank paid dividends and bonus shares at a rate of 30% in 2021 and 2022.

However, many shareholders asked the board to consider paying a 10% cash dividend to retain investors.

With an after-tax profit of about VND4.9 trillion ($208.55 million) in 2022, there is no reason for the bank not to pay 10% in cash dividends, they argued, noting this would encourage investors in the context of the bank's low share price.

In response, Linh said the bank will pay dividends to shareholders after it completes its divestment from its financial wing FCCOM.

Up to 89.43% of MSB shareholders approved the profit distribution plan for 2022.

According to the general director, in 2023, MSB targets VND6.3 trillion ($268.14 million) in pre-tax profit and VND230 trillion ($9.79 billion) in total assets, up 9% and 8% year-on-year, respectively.

Credit is expected to expand 15% to VND141.7 trillion ($6.03 billion), while capital mobilization from deposits and bonds is forecast to rise 10% to VND142 trillion ($6.04 billion), with the non-performing loan ratio kept below 3%.

In the first quarter of 2023, the bank's total assets reached VND236 trillion ($10.04 billion), up 11% compared to the end of 2022. Its credit increased by 13.17% to VND136.8 trillion ($5.82 billion), while deposits hit VND126 trillion ($5.36 billion).

The bank’s pre-tax profit reached more than VND1.5 trillion ($63.8 million), a quarter-on-quarter increase of 2%.

MSB was set up in 1991 and now operates more than 60 branches and over 200 transaction offices across Vietnam. It is listed on the Ho Chi Minh Stock Exchange as MSB.

As of the end of December 2022, the lender’s total assets were around VND213 trillion ($9 billion). Its current charter capital is VND20 trillion ($848 million). MSB is one of the most efficient medium-sized credit institutions in Vietnam.

The bank’s long-term deposit and issuer ratings were labeled “B1” by international ratings agency Moody’s in September 2022, while the outlook rating was “stable” over the following 12-18 months.

On the stock market, MSB closed the Friday session at VND12,350 ($0.53).