In compliance with the Vietnamese central bank's goals to restructure lending institutions saddled with debt, Phuong Tay Bank is planning to merge with Petrovietnam Finance Corp. The tie up would make Phuong Tay Bank and PVFC into a mid-sized banking institution having equity of 9.16 trillion dong or US$438 million.
The other name for Phuong Tay is Western Bank and in the merger plan sent to shareholders, PVFC would rescue Phuong Tay from bad debts, increase PVFC's competitiveness and cut down the stake of Petrovietnam's stake in PVFC.
According to Phuong Tay Bank, it would face 'difficulties with medium and long term liquidity without adjustments in funding and assets' arising from the merger. This comes after the government ordering Petrovietnam to exit PVFC and concentrate on its oil and gas business. PVFC has reported at least 2.8 trillion dong in bad debt.
When asked for comments, PVFC could not be reached when called.
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