Merger reveals Habubank losses only half of those claimed

In the process of merging, Saigon-Hanoi Commercial Joint Stock Bank (SHB) suddenly announced Hanoi Building Commercial Joint Stock Bank (Habubank)'s losses were only half of those in their initial statement. SHB Chairman Do Quang Hien Habubank (traded as HBB) held a shareholders meeting on April 28, in which they agreed on a plan to merge with SHB. Habubank's losses totaled at over VND4 trillion (USD191.66 million), and it was thought that they would need three years to make up for this amount. However, during the audit included in the merger process, it was found that Habubank's losses were only VND1.829 trillion (USD87.63 million), and could be made up for within the year. Do Quang Hien, SHB Chairman of Board of Directors, said after HBB shareholders' meeting, the two sides sat down and agreed to adjust the numbers in light of these new findings. SHB General Director, Nguyen Van Le, said that there have been changes in plans to settle the debts of Vietnam Shipbuilding Industry Group (Vinashin) to Habubank, as well as the bank's provisional fund. Le said that the auditing agency has required Habubank to set aside VND3.7 trillion (USD177.28 million) in order to deal with Vinashin's debts and bank bonds. After the merger, however, SHB will seek approval from the State Bank of Vietnam (SBV) for a stipulation that would make VND342 billion (USD16.38 million) of the fund available for use during the first year. The auditing agency also required that Habubank set up a provisional fund amounting to 50% of expired inter-bank deposits, which would affect the bank's profits. But according the SBV regulation, the fund does not have to be set up until next year, giving Habubank some time to make up for losses and improve operations. There have been plans to settle Vinashin's debts and bonds at financial institutions, including HBB, so the bank may no longer have to set up a fund for it. Under its merger plan, SHB would help recover Habubank's bad debts, estimated to be around VND236 billion (USD11.3 million). SHB has set a target to make VND1.2 trillion (USD57.49 million) in pre-tax profits in 2012, while HBB's profits are expected to be around VND600-VND700 billion (USD28.74 million-USD33.54 million) during the year. Le said that the combined profits would likely offset Habubank's past losses. Maintaining separate operations According to Do Quang Hien, after the merger, Habubank's human resource and management structure will be separate from those of SHB. As a result, all current products, services and staff of Habubank will remain the same so as to take advantage of the bank's strengths. "SHB's managing board has decided to focus on Habubank's strong points. This means minimising expenses, providing more funding, maintaining a good customer base and lowering lending interest rates," he said. He added, however, that HBB shareholders will not be entitled to dividends this year, because they will get a 0.21% dividend when exchanging HBB for SHB shares. The two sides have agreed that 1.34 shares of HBB will equal one share of SHB. New SHB shares will be issued to stockholders of HBB. Forex News Travel to Vietnam tour to vietnam Tour Ghep Mien Trung Tour Trang Mat yen sao hitech review hue tourism vietnam weight loss cute girl dac san hue how to solve rubik how to tie a tie how to be pregnant how to cv what is fashion trends visit vietnam
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