Bank mergers are becoming an inevitable trend as Vietnam’s financial system faces pressure to strengthen capital, enhance competitiveness and comply with international Basel III standards. Each bank M&A deal carries potential risks related to assets, non-performing loans, technology and governance, while also opening up opportunities for growth, market expansion and resource integration. Understanding these trends and driving forces will help banks optimize benefits and minimize risks during consolidation.
What is a bank merger? Why has it become an inevitable trend?
A bank merger (Bank M&A) is the combination of two or more banks to increase capital scale, expand networks, and enhance competitiveness. In Vietnam, bank M&A is not merely a business decision but a core strategy for restructuring the banking system under the direction of the State Bank of Vietnam (SBV).
There are four major drivers behind bank mergers:
Capital pressure under Basel III
Basel III sets strict requirements on capital adequacy, risk management and resilience. Banks with limited financial capacity face challenges in raising capital independently, making M&A a suitable solution to meet international standards.
Eliminating weak banks
During 2023 – 2026, Vietnam continues restructuring its banking system, addressing bad debts and strengthening financial stability. Mergers serve as a solution to “rescue” weak banks and transfer them to stronger institutions.
Increasing competition
The rapid growth of digital banking, fintech, and Big Tech forces traditional banks to improve technology, services and capital. Mergers help expand customer bases, increase competitiveness, and create economies of scale.
Global trend
Globally, bank M&A is common to form large financial groups capable of adapting to economic fluctuations. Vietnam is no exception, especially with deeper international integration.
Overview of bank merger trends in Vietnam
In recent years, Vietnam’s banking sector has shown a clear M&A trend. According to public reports, the 2024 – 2025 period has seen notable compulsory transfer deals, where the State Bank directs large banks to acquire weaker credit institutions. This not only supports system restructuring but also strengthens overall financial stability.
Key drivers include Basel III compliance, higher capital requirements, technological competition and market expansion needs. Foreign investors are increasingly interested in Vietnam’s banking sector, particularly major financial groups from Japan, South Korea and Europe. The relaxation of foreign ownership limits up to 49% in some post-merger banks also creates opportunities for international capital inflows.
This combination shows that bank M&A is not only a restructuring tool but also a strategy for international expansion and competitiveness.
Legal framework for bank mergers in Vietnam
Bank mergers in Vietnam are strictly regulated by the State Bank of Vietnam. Under Circular 36/2015/TT-NHNN, procedures for mergers, consolidations and conversions are clearly defined.
Recently, new updates have been introduced under Circular 26/2025/TT-NHNN, effective from October 25, 2025, amending several provisions related to merger approval procedures.
Specifically, the acquiring credit institution must prepare and submit a dossier in accordance with regulations. The SBV reviews and responds within a specified timeframe, followed by public disclosure upon completion.
A transparent legal framework is essential–not only for compliance but also for building trust among investors and shareholders.
Strategic benefits of bank mergers
Bank mergers offer significant strategic advantages:
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Increased capital & financial strength: Acquiring banks absorb assets and capital, strengthening financial capacity and meeting Basel III requirements.
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Optimized scale & network: M&A consolidates branches, offices and human resources, reducing operating costs.
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Improved governance & risk management: Larger banks can apply advanced management systems to smaller institutions.
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Market & technology expansion: Access to new customers, advanced technologies and valuable data.
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Asset value optimization: Revaluation of collateral, real estate and non-performing assets.
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Attracting foreign capital: Higher foreign ownership limits post-merger increase attractiveness to global investors.
These strengths make bank M&A a strategic path for credit institutions to enhance performance and competitiveness.
Challenges and risks in bank mergers
Despite strong potential, bank mergers carry risks:
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Hidden non-performing loans
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Inaccurate asset valuation
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Technology integration challenges
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Cultural integration issues
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Legal and compliance risks
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Difficult price negotiations
Without proper valuation, these risks can significantly impact deal success.
Common valuation methods in bank M&A
Hoang Quan Appraisal typically combines multiple approaches:
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Asset Approach: Net asset value after adjusting bad debts and restructuring costs
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Income Approach: Discounted future cash flows
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Market Approach: Benchmarking P/B, P/E, ROE with comparable banks
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Hybrid Approach: Combining all methods for a comprehensive valuation
This combination ensures reliable and well-rounded valuation reports.
Why valuation is critical in bank mergers?
Bank valuation requires deeper analysis than typical business valuation:
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Assessing collateral quality (real estate, projects, securities)
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Analyzing credit portfolios and default risks
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Evaluating profitability indicators (ROA, ROE, NIM)
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Assessing operational, compliance and market risks
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Identifying intangible value (brand, technology, customer data)
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Auditing historical data and forecasting growth
A professional valuation report helps:
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Optimize deal value
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Minimize legal and financial risks
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Provide transparent negotiation benchmarks
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Ensure compliance with SBV and Vietnamese regulations
Valuation solutions for bank M&A by Hoang Quan Appraisal
Hoang Quan Appraisal is a leading provider of specialized valuation services for bank M&A transactions in Vietnam. With over 23 years of experience, the company has a team of certified financial and banking experts with deep knowledge of international standards and SBV regulations.
We apply advanced valuation methods such as DCF, industry multiples, credit portfolio analysis, collateral valuation and operational risk assessment. Each report undergoes multi-level quality control to ensure transparency, accuracy and alignment with clients’ negotiation goals.
Hoang Quan Appraisal offers end-to-end solutions: site surveys, financial analysis, legal asset appraisal, credit quality review, technology and data assessment and optimal enterprise valuation. We also support clients during negotiations, providing value benchmarks to ensure efficient, secure transactions.
Hoang Quan Appraisal is committed to partnering with credit institutions, commercial banks, and investors in all M&A transactions–reducing risks, enhancing efficiency and maximizing value. If you are preparing for a merger, consolidation or acquisition, Hoang Quan Appraisal is your strategic partner.
Hoang Quan Appraisal Co., Ltd.
Address: Hoang Quan Appraisal System
Phone: 0934.252.707
Email: contact@sunvalue.vn
Facebook: Hoang Quan Appraisal
Website: hqa.com.vn
Conclusion
Bank mergers will continue to be a dominant trend in Vietnam’s financial restructuring. While offering great opportunities, they also carry risks without accurate valuation of assets, bad debts and profitability. With deep expertise and extensive experience, Hoang Quan Appraisal delivers transparent, standardized and optimized valuation reports for all bank M&A transactions. Contact us today for expert consultation.
