ANTD.VN - From a rural bank with a charter capital of only 400 million VND to a private commercial joint stock bank in the top 5 of the system in terms of charter capital, SHB has made a leap in scale after 30 years of establishment. SHB's spectacular breakthrough in capital is partly due to its extremely smart and bold M&A strategy: It is the only listed bank merging with another listed bank, the only bank to both M&A banks and M&A financial companies...
Spectacular mergers and breakthroughs
Statistics from the State Bank of Vietnam show that as of September 30, 2023, there are 5 private commercial banks with the highest charter capital, including: VPBank, MB, ACB, SHB, Techcombank. Among these names, SHB is the only case with a strong transformation process from a rural to an urban commercial bank, with charter capital increasing tens of thousands of times over the past 30 years.
Established 30 years ago, Nhon Ai Rural Commercial Joint Stock Bank was then a rural bank owned by Mr. Tran Ngoc Linh, operating in Can Tho. The change of ownership in 2005 brought Nhon Ai beyond the vision of a rural bank, officially becoming an urban bank and changing its name to SHB, starting to expand its scale of operations across the country.
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SHB gradually affirms its position in the commercial banking system. |
The relationship began when Mr. Do Quang Hien - current Chairman of SHB - went to Can Tho to meet Mr. Tran Ngoc Linh in 2005. At that time, many economic groups came to discuss and contribute capital to Nhon Ai Rural Bank but were unsuccessful. When he met Mr. Hien, Mr. Linh felt the trust and confidence and decided to put Nhon Ai Bank - a place that was almost like his flesh and blood - in Mr. Hien's hands. " I chose Mr. Do Quang Hien. Firstly, Mr. Hien's heart loves banking. Secondly, Mr. Hien has a vision and can develop Nhon Ai Bank into a large bank. " - Mr. Tran Ngoc Linh shared.
The growth of SHB after 18 years of changing owners is proof of the right choice of the owner of Nhon Ai Bank when choosing a place to put his trust. From a rural bank with a charter capital of 400 million VND, SHB now has a charter capital of nearly 37,000 billion VND, ranking in the top 5 private commercial banks with the highest charter capital in the system.
This strong breakthrough is partly thanks to this bank's extremely smart and bold M&A strategy.
In 2012, when the banking restructuring process entered its final stage, the banking market was shaken by the merger between two listed banks: SHB and Habubank. To date, this is still the only spectacular merger in Vietnam: the successful merger of two banks listed on the stock exchange. This is also a rare successful merger between a strong bank and a weak bank, especially when the two banks have similar charter capital and network.
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SHB has become a very familiar brand to all customers. |
“Of course, different mergers and acquisitions have their own characteristics, but we are confident that the merger has been successful so far. Almost all Habubank employees are still with SHB. It is a very successful merger in terms of people, social impact and then development,” said Ms. Ngo Thu Ha - General Director of SHB.
Not only with the Habubank merger, SHB also demonstrated its boldness and determination in the M&A strategy of Vinaconex-Viettel Finance Company, then established SHBFinance Consumer Finance Company. These two mergers (merging Habubank and Vinaconex-Viettel Company) took place within only 5 years, demonstrating SHB's potential and determination in expanding its scale of operations.
After the two mergers, not only did SHB's charter capital increase, making it one of the private commercial banks with the largest charter capital in the system, but SHB's acquisition of Vinaconex-Viettel Finance Company also proved to be a "one capital, four profits" investment. In 2021, SHB successfully signed a contract to transfer the company's capital to its partner Krungsri (Thailand). According to Krungsri, the bank spent 5.1 billion Thai baht, equivalent to 156 million USD, or more than 3,500 billion VND, to acquire SHB Finance, which is 3.5 times the charter capital of SHBFinance.
This deal helps SHB bring in huge capital to strengthen its financial capacity, expand business operations, and increase the ability to prevent potential risks.
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SHB continuously contributes to the country's social security program. |
Ready for the breakout phase
To date, SHB is also the only bank that has accepted the merger of both banks and financial companies. However, looking back, the merger of both banks and financial companies at that time was a big challenge for SHB as it had to simultaneously face many market fluctuations as well as deal with the existing problems and shortcomings of the merged organizations. “SHB had to devote a lot of resources, including resources from business activities, to solve those problems,” said Ms. Ngo Thu Ha, General Director of SHB.
It took SHB 10 years to both deal with existing problems and accumulate internal resources to ensure safe and sustainable development in its operations. And by 2021, SHB had recovered debts and set aside provisions to pay off all VAMC and Vinashin bonds ahead of schedule.
After that period of persistent accumulation, SHB has a solid foundation: strong financial potential, being one of the private commercial joint stock banks with the most powerful network, both domestically and internationally. Specifically, SHB is the first joint stock bank to have branches in both Laos and Cambodia and then established subsidiary banks in 2 countries in Indochina, and opened a representative office in Myanmar.
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SHB's Payment Card service is always trusted and used by customers. |
That is the foundation for breakthrough, the condition for SHB's transformation to be stronger and more comprehensive now, the premise for the bank to set ambitious goals: by 2027, it will become the No. 1 bank in terms of efficiency, applying leading modern technologies and being the most favorite digital bank, with a vision to 2035 to become a modern retail bank in the Top of the region and at the same time have plans to expand further to the markets of Australia, Europe, and Africa.
To realize the goals, SHB is closely following 4 major pillars for a strong and comprehensive transformation strategy for the period 2022-2027: Institutional and mechanism innovation; Customer and market-centric; People as the subject; Information technology platform and digital transformation.
SHB’s development has attracted much attention not only domestically but also in the international financial market. According to Reuters, many Korean and Japanese investors are interested in the deal to sell 20% of SHB’s shares to foreign partners. The potential deal could value the bank at $2-2.2 billion. If the deal is successful and the valuation is approved by all parties, SHB will earn hundreds of millions of dollars.
Faced with the opportunity for strong development, SHB still chooses cautious and sure steps. SHB representative said that the bank is still actively negotiating with corporations and large financial institutions not only in Asia but also around the world, with the goal of ensuring maximum benefits for the bank and shareholders.
SHB's criteria for selecting strategic shareholders are organizations and financial institutions: first, they are "well-matched", of the same size or higher, have good reputation and financial capacity; meet the strict regulations of the State Bank; have a clear foreign investment strategy and have their own strengths to develop together...
“ The next journey will be a breakthrough innovation in business operations so that SHB can grow stronger and stronger, suitable and worthy of its current scale. However, the development must also be divided into many stages, and implemented step by step, safely and sustainably, not “a carp turns into a dragon” – sudden growth immediately”, said SHB leaders.
On the stock exchange, SHB shares are always of interest to investors because the bank always pays dividends regularly to shareholders every year. In 2022, SHB will pay dividends in shares at a rate of 18%. It is known that SHB is also one of the first banks listed on the stock exchange. Currently, SHB is in the Top of enterprises with the largest number of shareholders with more than 70,000 shareholders and this bank's shares are on the VN30 list - representing the group of stocks of enterprises with large capitalization in the market, thanks to meeting important criteria on scale and quality...
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