Want to be in the loop?
subscribe to
our notification
Business News
M&A IN BANKING INDUSTRY EXPECTED TO STAY HIGH IN H2
Mergers and acquisitions (M&A) in the banking industry are expected to remain high for the rest of the year as the industry continues the digital transformation process, according to experts.
According to PricewaterhouseCoopers (PwC), the financial services (FS) industry’s need for digital capabilities, combined with sustained pressure from regulators and disruption from platforms and fintechs, means M&A will continue to be a driver for transformation.
It also explains why FS is second only to technology, media and telecommunications (TMT) in terms of M&A investment, accounting for almost a quarter of deal value in the first half of 2022. A continued focus on technology, the growing demand for sustainable investment options, and lower valuations will keep M&A activity high during the second half of this year.
Ong Tiong Hooi, PwC Vietnam’s Partner, said: “Despite macro-economic headwinds, 2022 will be another robust year for M&A transactions in Vietnam. M&A activities continue to attract a lot of attention from foreign investment funds. We're seeing an acceleration of strategic decisions to enhance portfolio optimisation, as dealmakers divest to free up capital to focus on acquiring capabilities and transforming core business areas through M&A."
According to Ong, Vietnam's economic recovery remains strong with GDP growth for 2022 forecast at 6.5%, much higher than the growth forecast for the Asia Pacific region at 4.4%.
In addition, he said, with supportive regulations and policies for investors, the second half of 2022 is providing an opportunity for dealmakers to reassess strategy and act boldly.
"Dealmakers are adapting to a new business climate in which, short-term volatility in financial markets, inflationary pressures, rapidly rising interest rates, supply chain disruptions and geopolitical tensions all appear to be developing into longer-term trends.
"That is the time for true leaders and best-in-class dealmakers to make bold moves and set the stage for the next five years, meeting the targets that matter most to their business or portfolio. M&A could be the way to pursue opportunities that deliver value in a challenging economy."
Yoshisawa Toshiki from Aozora bank also said M&A activities will increase sharply after the pandemic, of which M&A in finance and banking in Vietnam will be better, thoibaonganhang.vn reported.
Currently, the Vietnamese Government has policies such as equitising State-owned enterprises and banks, and restructuring weak, undercapitalised and substandard banks. This is an opportunity for foreign organisations to make investments. Japan’s medium-sized banks are also considering the financial market and M&A in Vietnam, Toshiki said.
A banking expert, who declined to be named, also shared there are many factors expected to attract foreign investors to M&A activities in the near future. Despite being under a lot of pressure, Vietnam is still controlling inflation well, while economic growth is recovering strongly with high consumer demand. When the economy grows positively, banking activities also prosper as banks are able to expand their credit and boost retail activities.
In order to increase the attractiveness for foreign investors to participate in M&A deals in the banking sector, experts recommended the Government loosen the foreign ownership room in domestic banks. Expanding foreign ownership not only helps banks increase capital but also makes foreign investors feel secure to invest more in the Vietnamese market. However, the expansion should be given only to reliable foreign investors, who have been proven as large banking and financial institutions in developed countries.
According to experts, with transparent and reputable financial institutions, if their ownership rate increases, they can use their financial and governance strengths to help domestic banks recover well and ensure healthy development. Vice versa, if their ownership rate is too low, they will not focus much on the banks to enable significant changes.
Source: VIR
Related News
ONE-TIME OFFER: COMPLEMENTARY CATHAY PACIFIC LOUNGE PASS
Begin your trip on the right note in Cathay Pacific’s first-ever ferry lounge, located at Shenzhen’s Shekou Cruise home port. Situated at the end of the pier, the ferry lounge offers a breathtaking 270-degree view of the sea. You can immerse yourself in sheer luxury and revel in the panoramic beauty. Catch a glimpse of Hong Kong in the distance.
VIỆT NAM TARGETS FULL MOBILE BROADBAND COVERAGE ON HIGHWAYS, INDUSTRIAL ZONES BY 2025
By 2025, Việt Nam aims to achieve one hundred per cent mobile broadband coverage on all national highways, expressways and railways under a plan to enhance the quality of Việt Nam’s mobile telecommunications network by 2025, which has been approved by the Ministry of Information and Communications (MIC).
VIETNAM ONE OF FASTEST-GROWING E-COMMERCE MARKETS IN SOUTHEAST ASIA
The report released on July 16 highlighted that the total GMV of Southeast Asia’s eight leading e-commerce platforms rose to $114.6 billion in 2023, up 15 per cent from 2022. The key drivers for the region's e-commerce GMV expansion in 2023 are Vietnam and Thailand, growing 52.9 per cent and 34.1 per cent on-year, respectively.
2025 PIVOTAL FOR STOCK MARKET UPGRADE EFFORT
The Ministry of Finance (MoF) is expected to soon publish the entire content of the draft circular amending and supplementing four circulars on transactions, registration, depository, and clearing, as well as operations of securities companies and information disclosure. This move, along with feedback and explanations, aims to meet the criteria for upgrading Vietnam’s stock market.
VIETNAM INTENSIFIES E-COMMERCE TAX SCRUTINY
The department plans to offer guidance for and hold direct dialogues with e-commerce taxpayers to ensure compliance. Efforts will also include updating the e-commerce database, conducting risk analysis, and leveraging artificial intelligence (AI) to manage data and issue alerts.
FOOTWEAR EXPORTS SEEN REACHING US$27 BILLION THIS YEAR
This optimistic forecast reflects the industry’s efforts to expand and diversify its markets. Lefaso indicated that Vietnam’s footwear sector will concentrate on traditional markets like the U.S. and the European Union, alongside markets with free trade agreements to maximize opportunities.