SITUATION OF MERGER OF SHB AND HBB
BANKS IN VIETNAM
NAME: TRAN THI KIM PHUONG (LUCY)
ID STUDENT: MA3N0206
CONTENTS
1. Overview SHB and HBB Banks
1.1 Summary of the merging banks (SHB bank)
1.2 Summary of the merged bank (HBB bank)
2. The causes for the merger
3. Benefits of the merger
4. Financial situation of the two banks at the time of the
merger
Overview
SHB and HBB
Banks
Summary of the merging banks
(SHB Bank)
Name of Company
Abbreviation
Establishment permits
Head Office
Website
Charter Capital
Logo
Saigon Hanoi Joint Stock Commercial Bank
SHB
0041-NH/GP by the State Bank of Vietnam
on 13/11/1993
77 Tran Hung Dao, Hoan Kiem, Ha Noi, Viet
Nam
www.shb.com.vn
4.815.795.470.000 VND
Information
Field of major business
Banking business according to the Law of
financial credit by the State Bank.
The branch network
As of 29 February, 2012:
SHB Bank has (1) Head
Office, (24) branches and
(133) transaction offices.
Subsidiaries
SHB bank has a subsidiary which is Asset
Management AMC company owned 100%
of the charter capital by SHB bank.
Overview
Summary of the merging banks
SHB and HBB
(SHB
Bank)
Banks
The process of formation and development
► 1993: Establishment of the Bank.
► 2007: the Vietnam Coal and Minerals Group and The Vietnam Rubber Group
officially became a strategic shareholder and comprehensive cooperation of
SHB bank. Contributing capital to establish some Joint Stock companies
► 2008: Increased its Charter Capital from 500 to 2,000 billion VND confirms
major turning point in the scale, position, potential of SHB.
► 2009: The 3rd bank in Vietnam Commercial Joint blocks officially listed 200
million shares at the Hanoi Stock Exchange; established and officially put into
operation the Saigon-Hanoi Debt Management and Asset Company (SHAMC).
► 2010: successfully issued 150 million shares raised the total charter capital
to nearly 3,500 billion VND; successfully issued 1,500 billion VND convertible
bonds.
► 2011: Successful changed of 1,500 billion VND bond raise charter capital to
4815.8 billion VND. Approved by the State Bank to open branch in Cambodia
and Laos. SHB Phnom Penh - Cambodia Branch has opened and put into
operation at the beginning in 2012.
Overview
SHB and HBB
Banks
Summary of the merged banks
(HBB Bank)
Name of Company
Abbreviation
Establishment permits
Head Office
Website
Charter Capital
Logo
Information
Field of major business
Hanoi Building Commercial Joint Stock Bank
HBB
00020/NH-GP by the State Bank of Vietnam on
06/06/1992
15-17 Ngoc Khanh, Ba Dinh, Ha Noi, Viet Nam
www.habubank.com.vn
4.050.000.000.000 VND
Banking business according to the Law of
financial credit by the State Bank.
The branch network
As of 29 February, 2012:
SHB Bank has one (1)
Head Office, (19) branches
and
(53)
transaction
offices,
(1)
Operation
Department, (7) Savings
Fund in the provinces and
cities across the country.
Subsidiaries
HBB bank has a subsidiary which is Securities
Hanoi Building Commercial Joint Stock Bank
owned 98.66% of the charter capital by SHB
bank.
Overview
Summary of the merged banks
SHB and HBB
(SHB
Bank)
Banks
The process of formation and development
►4/1989: Establishment of the Bank
►1992: a charter capital of 5 billion VND. Performing some operations of
foreign currency and banking services in foreign currency.
►1995: Completed the issuance of shares and increase its charter capital to
24.3 billion VND.
►1996: Increasing its charter capital to 50 billion VND.
►2001: Completed the equipped centralized bank management software and
became one of the first banks of Vietnam perform centralized data management
and online system.
►2005: Deploying automated banking services, issuing HBB Vantage,
equipped with ATM / POS system and card joining the alliance VNBC cards
►2006: was one of the first four banks increase its charter capital to 1,000
billion VND.
►2007: completed the selection of Deutsche Bank (Germany) is a foreign
strategic partner and increased its charter capital to 2,000 billion VND.
Overview
Summary of the merged banks
SHB and HBB
(SHB
Bank)
Banks
The process of formation and development (cont.)
►2009: completed the increase its charter capital to 3000 billion VND and
official launch customer service center - opened up a channel approach
products and services to customers outside of the bank card and Internet
►2010: successfully issued 10.5 million convertible bonds (1.050 billion VND
respectively). officially listed all the 300 million Joint Stock, equivalent to a value
of 3.000 billion VND to Hanoi Stock Exchange (HNX), stocks are HBB.
►2011: Completed to change 10.5 million issued bonds to raise the charter
capital to 4,050 billion VND.
The causes for the merger
Summary of the cause financial difficulties for HBB led to the
merger
►Focus on outstanding loans companies of Vinasin
►The general economic downturn led to the bad debt ratio and overdue
debts customer higher
►Risk management system did not detect and prevent fraudulent
behavior of customers
►Pressure on growth in the context of the banking business is very
much dominated by the regulations of the State Bank led to Bank
implemented of high-risk transactions.
►The financial market of Vietnam was a stub, has not really developed
makes Banks had no opportunity to access and use the powerful tool to
insure the interest rate risk, exchange rate risk ... thereby, affecting the
efficiency of business operations
The causes for the merger (cont.)
HBB need to have additional new funding to operate and overcome the
current period
There are two solutions to make:
►Solution1: The shareholders of HBB will contribute additional capital;
►Solution2: Merger HBB to other banks would be better to support the
shareholders and employees of HBB in the next stage.
HBB Board of Directors has decided to choose the solution 2 by the existing
shareholders of HBB were not ready to contribute additional capital to HBB
during this period.
 SHB emerged as a candidate for the Bank's brightest based on the
following reasons:
► SHB is a partner with financial strength, developing ambitious (reflected in
the strategic development of retail banking, versatile and powerful financial
groups in the country and the Indochina region).
► SHB approach for HBB in the merger is practical and feasible.
► The intense competition in the market economy requires economic
organization must have a healthy financial background, large scale.
Benefits of the merger
The merger creates a strong financial institutions include:
► charter capital of nearly 9,000 billion VND and the scale of total assets of
over 100,000 billion VND
► There are 500,000 customers and more than 4,600 employees.
► subsidiaries had capable of providing support activities, increased benefits
for customers and increase non-interest income for the Bank include: stock
company; Asset Management of the Bank Company
► there are areas of operations in the Indochina region with branches in Laos
and Cambodia;
► there is strong support and customer who operate in the core areas for the
development of the economy such as coal, mineral, industrial crops (rubber),
infrastructure development.
► having the ability to provide services efficiently and safely for a large volume
of individual customers closer to urban culture and their consumption habits in
order to contribute to bring these customers have the life and better facilities.
Financial situation of the two banks at the time
of the merger
Financial situation of the two banks at the time
of the merger
Financial situation of the two banks at the time
of the merger
 HBB was be accumulated losses of up to 4066 billion (on the basis of
provision for Loans, investments at greatest risk may occur). One of the
main reasons is due to set aside sufficient risk provision for loan Vinasin,
with a total value of setting up to 1,860 billion and bonds Vinasin was 376.26
billion.
 To ensure the interests of shareholders and facilitate the development of
Bank after the merger in the search for strategic investors, resource
mobilization and other activities, the Bank after the merger consult the
General Meeting of Shareholders approved the provision of risk sufficient for
the loan and bond investment of Vinashin within 5 years, each year about
372 billion standby lending and 75.2 billion standby bond Vinashin.
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