Năng lực cạnh tranh của các ngân hàng thương mại việt nam sau sáp nhập và mua lại (ma) tt tiếng anh

MINISTRY OF EDUCATION AND TRAINING

THE STATE BANK OF VIET NAM

BANKING UNIVERSITY HOCHIMINH

LE TRUC THUAN

THE COMPETITIVENESS OF VIETNAMESE
COMMERCIAL BANKS AFTER MERGER AND
ACQUISITION (M&A).
SUMMARY OF THE THESIS
Major: Finance - Banking
Code: 9.34.02.01
The scientific instructor:
Assoc.Prof. Dr. PHAN DIEN VY

HO CHI MINH CITY, 2020 February


PUBLISHED SCIENTIFIC WORKS
▪

Restructuring the banking system: Results and roadmap for
the new period; Finance Magazine - Term 2 - March 2016.

▪

About banking M&A activities in Vietnam over the past
time; Economics and Forecasting Report - No. 8 - April
2016.

▪

Improving the quality of merger activities of Vietnamese
banks; Finance Magazine - Term 1 - December 2018.

▪

Enhance the financial capacity of Vietnamese commercial
banks after mergers and acquisitions (M&A); Journal of
Industry and Trade - No. 1 - January 2019.

▪

Competitive advantage of Vietnamese commercial banks;
Economics and Forecasts - No. 5 - February 2019.


1
CHAPTER 1
INTRODUCTION OF THE STUDY

1.1. The reason to choose a topic
Vietnam officially became a member of the WTO in
November 2006 and in April 2007 began to implement
international commitments on opening of financial services
market and competitive pressure in the banking sector. head
appearance and significant increase.
Recently, there have been many studies on the
competitiveness of Vietnamese commercial banks, but most of

these studies are limited to a commercial bank or Vietnamese
commercial banks in general but not researched. about
commercial banks after M&A implementation. Thus, the overall
review of determining the factors affecting and measuring the
impact level on the competitiveness of commercial banks after
M&A in Vietnam is very important, meaningful and valuable.
High practical value.
Stemming from the practical and urgent demands of the
banking system in Vietnam, especially in the context of
international economic integration and globalization, the
development trend of a managed economy of the Government
indirectly through economic, financial - banking policies with the
desire to research to find out solutions to improve the
competitiveness of Vietnamese commercial banks after M&A,
the author has chosen the topic. "The competitiveness of


2
Vietnamese commercial banks after the merger and acquisition"
is their doctoral thesis.
1.2. Objectives of the study
Overall objective: Building a solution group to contribute
to improving the competitiveness of Vietnamese commercial
banks after M&A.
Specific objectives:
- Analyze and assess the real situation of commercial banks
after M&A to identify the factors that influence and quantify the
impact level on the competitiveness of these commercial banks.
In order to see the achieved results, the shortcomings, limitations
and causes of Vietnamese commercial banks after M&A?

- Building strategic solutions groups for the period of 20202030 for commercial banks after M&A and vision for the future.
1.3. Research questions:
- Assessing the real situation of competitive capacity of
Vietnamese commercial banks after M&A through which
criteria?
- Factors affecting the competitive capacity of
Vietnamese commercial banks after M&A?
- The degree of impact from the factors affecting the
competitiveness of Vietnamese commercial banks after
M&A?


3
1.4. Objects and scope of the study
Objects of researching: The thesis will focus on
studying the influencing factors and the level of impact on the
competitive capacity of Vietnamese commercial banks after
M&A.
Researching scope:
- Regarding space: Researching 8 typical commercial
banks that have participated and succeeded in M&A deals in
Vietnam including: SHB, HDBank, SCB, LPB, PVcombank,
Sacombank, BIDV, Maritimebank.
- Regarding time: Secondary data is collected in the
main period of the period of 2011-2018, including data
available from financial statements and annual reports of
Vietnamese commercial banks after M&A, SBV reports,
World Bank reports, Bank supervision system reports.
Primary data was collected for 6 months from 7/2018 to
12/2018.

1.5. New contributions of the thesis
Based on secondary data to analyze the current
competitiveness situation of 8 commercial banks after M&A
in Vietnam, it shows that after conducting M&A, Vietnamese
commercial banks include: LPB, SCB, SHB, HDBank,
Pvcombank, Sacombank, BIDV, Maritimebank had an
increase in targets, such as: Total assets, mobilized capital,
outstanding loans, number of branches and transaction offices.
NPL ratio decreased, capital adequacy ratio (CAR) increased.


4
This shows that after M&A, the commercial banks have
become healthier, stable business operations and achieved the
operational safety goal of the State Bank, preventing
bankruptcy of some weak commercial banks.
However, considering the ratios of ROA and ROE
efficiency of commercial banks after M&A reached low and
did not improve compared to the previous M&A, profit growth
was slower than another commercial banks of the same size
over the years. It shows that the business performance of
commercial banks after M&A has not improved significantly,
the competitiveness is not better than before M&A and
compared to other commercial banks of the same size.
Quantitative analysis showed similar results that the
competitiveness of commercial banks after M&A is not much
different between banks and the competitiveness of these
banks is generally not high.
Based on primary data to measure the impact of factors
on the competitiveness of commercial banks after M&A in

Vietnam and the regression equation as follows:
Competitiveness = 0.287 * Financial capacity + 0.262
* Technology capacity + 0.320 * Prestige of the bank + 0.281
* Service fee + 0.266 * Quality of service + 0.193 *
Transaction network + 0.287 * Power executive management
force
The regression analysis results show that the factor
"Bank's reputation" has the strongest influence with the


5
coefficient β = 0.320; the factors "Financial capacity" and
"Executive management capacity" with the same coefficient β
= 0.287; The fourth influencing factor is "Service fee" with
coefficient β = 0.281; The fifth influencing factor is "Service
quality" with coefficient β = 0.266; The sixth influence factor
is "Technology capacity" with coefficient β = 0.262; The
lowest affecting factor is "Transaction network" with
coefficient β = 0.193.
The thesis has introduced solutions to improve the
competitiveness of Vietnamese commercial banks after M&A,
namely: Enhancing financial capacity; Improve technology
capacity; Improve management and administration capacity;
Improve quality serving; Promote customer care; Improve the
quality of human resources; Expand and diversify banking
services; Enhance the position and reputation of the bank;
Develop an appropriate trading network system.


6

CHAPTER 2
THEORETICAL BASIS AND RESEARCH OVERVIEW

2.1. Theoretical basis for merger and acquisition
2.1.1. Concept of merger and acquisition
According to Mallikajiunappa, T. and P. Nayak,
“Acquisition is an effective control action of a company for assets
(buying assets, buying shares, gaining control through the board
of directors) of another company that doesn't need an
organizational or organizational unity.
According to Ransariya, Shailesh N., “Merging is an
abbreviation of the words that make up Merger itself: M - Mixing
(mixing), E - Entity (entity, subject), R- Recourse for (resources
for), G- Growth (growth), E-Enrichment (enrichment), RRenovation (innovation). An acquisition can be defined as an act
of obtaining effective control of one company over another
company's assets without the need for any combination of other
companies”.
2.1.2. Commercial bank concept after merger and acquisition
According to the Regulation on merger, consolidation and
acquisition of credit institutions (Issued together with Circular
No. 04/2010 / TT-NHNN of February 11, 2010 of the Governor
of the State Bank of Vietnam):
Merger of a credit institution: is a form whereby one or
several credit institutions (hereinafter referred to as a merged CI)


7
merges into another credit institution (hereinafter referred to as
the merging CI) by transferring all assets, legal rights, obligations
and interests to the merged CI and at the same time to terminate

the existence of the merged CI.
Consolidation of credit institutions: is a form whereby two
or a number of credit institutions (hereinafter referred to as
consolidated credit institutions) are merged into a new credit
institution (hereinafter referred to as the consolidated credit
institution) by transferring all assets and rights , legal obligations
and interests to the merged CI, and ending the existence of the
merged CI.
Acquisition of a credit institution is the form whereby a CI
(hereinafter referred to as the acquiring CI) purchases all assets,
rights, obligations and lawful interests of another CI (hereinafter
referred to as the acquired CI). After the acquisition, the acquired
CI becomes a subsidiary of the CI.
In the scope of the thesis, the author introduces the concept
of commercial banks after M&A according to Circular 04/2010 /
TT-NHNN, to select commercial banks and limit the scope of the
thesis.
2.1.3. Methods of merging and acquiring commercial banks
According to the M&A deals in the world, there are the
following common methods of implementing M&A in banks:
Voluntary negotiation; Collecting stocks in the stock market;
Bidding; Buy an asset; Entice dissatisfied shareholders.


8
2.2. Theoretical basis of competitiveness of commercial banks
2.2.1. Concept of competition of commercial banks
The author gives his own opinion on the competition of
commercial banks is the competition between commercial banks
on products and services provided to survive and develop to

expand market share, improve the prestige and advantages of
commercial banks. The school aims to increase more profits.
2.2.2. Types of competition of commercial banks
Based on the participants in the competitive market, there
are 3 types: Competition between banks and non-bank financial
institutions; Competition among domestic banks and foreign
banks; Competition between state-owned banks and joint stock
commercial banks.
Based on the morphology and nature of competition in the
market, competition is divided into 2 categories: Perfect
competition; The competition is not perfect.
Based on the scope of economic industry, there are 2 types
of competition: intra-industry competition; Competition among
industries.
2.2.3. Features of bank competition
Products have little difference; Price competition in
banking activities is also quite limited; The scope of autonomy in
competition of commercial banks is also more limited than
businesses; Competition of commercial banks is under the
sensitive influence of international financial markets; Banking


9
competition is based heavily on psychological factors such as
trust, expectations of depositors; ...
2.2.4. Methods of competition of commercial banks
Compete by creating a variety of service portfolios;
Compete by improving the service delivery process to increase
utilities, improve service quality, minimize service delivery time,
ensure customer safety; Competing on price, including costs,

interest rates, and service charges; Competition by Marketing
activities; Compete by expanding the network of transaction
offices.
2.2.5. Concept of competitiveness
According to Porter (1985), “Competitiveness of
enterprises is the ability to maintain, expand market share and
achieve high profits of businesses.
2.2.6. The level of competitiveness
National competition; Competition at the industry level;
Competition at the product / enterprise level.
2.2.7. The concept of competitiveness of commercial banks
after the merger and acquisition
From the author's point of view, commercial banks after
M&A are essentially commercial banks, so the competitiveness
of commercial banks after M&A is conceptualized as the ability
created by banks after M&A on the basis of maintenance and
development. inherent advantages to attract customers, expand
market share and increase profits for banks.


10
2.2.8 Factors affecting the competitiveness of commercial
banks
2.2.8.1. Internal factors
Financial capacity; Technological capacity; Reputation of
the bank; Transaction network; Service quality; Service charge;
Human Resources; Executive management capacity:
2.2.8.2. External factors
Legal and political environment; Economic environment;
Social and cultural environment; Natural environment; Science

and technology environment.
2.2.9. Experience in improving the competitiveness of foreign
banks and lessons for commercial banks after the merger and
acquisition in Vietnam
Experience of improving the competitiveness of a number
of foreign banks
Lessons for Vietnamese commercial banks after the merger
and acquisition


11
CHAPTER 3
MODELS AND RESEARCH METHODS OF THESIS

3.1. Research models
Based on the standard form of linear regression equation,
the research model of the thesis is built in the form:
Y = β0 + β1 * X1 + β2 * X2 + β3 * X3 + β4 * X4 + β5 *
X5 + β6 * X6 + β7 * X7
Inside:
- Dependent variable Y = Competitiveness
- β0 is the blocking coefficient, β1 → β7 is the slope in the
relationship between the independent variable Xi to the
dependent variable Y.
- Independent variables: X1, X2, X3, X4, X5, X6, X7 with:
X1 is the Financial Capacity of the Bank
X2 is the Bank's technological capability
X3 is the Prestige of the Bank
X4 is the Bank's Quality of Service
X5 is the Bank's Transaction Network

X6 is the Bank's governance and management capability
X7 is the Bank Service Fee
3.2. Process of researching


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(1) The qualitative research phase: to build and adjust the
scales to design the questionnaire (survey sheet) for quantitative
research.
(2) Quantitative research phase: This is the stage
conducting the survey, collecting data from reality to test the
scale and research model.
3.3. Data and data collection methods
3.3.1. Primary data
Primary data sources were collected by the method of
surveys and surveys through questionnaires for senior, middle
leaders, officials and employees of 8 commercial banks after
M&A in Vietnam (SHB, HDBank, SCB, LPB, PVcombank,
Sacombank, BIDV, Maritimebank). The formulation of the
questionnaire is based on research concepts, combined with
qualitative research methods through expert methods and indepth interviews.
3.3.2. Secondary data
The secondary data source for analyzing the competitive
status of Vietnamese commercial banks after M&A is collected
from the SBV's reports of the Banking supervision system and
from the financial statements and annual reports of Main 8
commercial banks of Vietnam after M&A in 2011-2018.
3.4. Research Methods
3.4.1. Qualitative research methods

13
The qualitative research method is the process of
codifying from individual documents and data to build a scale for
model variables. In this study, the author conducted an overview
from domestic and foreign documents in combination with the
use of expert method to build draft scales for independent and
dependent variables of the model. then combined with the use of
in-depth interviews with the subjects to be surveyed are officials
and employees of 8 commercial banks after M&A in Vietnam
(SHB, HDBank, SCB, LPB, PVcombank, Sacombank, BIDV,
Maritimebank) to adjust the draft scale to suit the actual context
of the banking industry in Vietnam and to serve the design of the
questionnaire (Questionnaire) used for quantitative research.
3.4.1.1. Professional solution
The expert method is used by the author to build and adjust
the draft scales for the independent and dependent variables of
the model from which to build the official scale for quantitative
research. Based on the overview from previous domestic and
foreign studies on factors affecting the competitiveness of
commercial banks in general, the author drafted his own outline
to interview with experts.
3.4.1.2. In-depth interview method
The objective of the in-depth interview method is to adjust
the content of draft scales designed from the results of the abovementioned expert method to complete the official scale used for
quantitative research.
3.4.2. Quantitative research method


14

Quantitative research methods are used to quantify the
relationship between variables in the research model and test the
research hypotheses obtained from theory through the use of
statistical analysis tools. The quantitative research process is
divided into 2 phases: preliminary quantitative research and
official quantitative research.
3.4.2.1. Preliminary quantitative research
The author conducted a preliminary quantitative study to
check the reliability of the scales, thereby eliminating the
inappropriate observable variables (if any) from which to build a
complete system of scales. official quantitative research.
3.4.2.2. Official quantitative research
The official quantitative research process in this study is
done by Pearson correlation analysis and regression analysis.
Regression analysis is the finding of the dependent relationship
of a variable, called a dependent variable or other variables,
called independent variables, in order to estimate or predict the
expected value of the secondary variable. belongs to knowing the
value of an independent variable.


15

CHAPTER 4
RESEARCH RESULTS OF THESIS

4.1. Situation of competitiveness of commercial banks after
M&A in Vietnam
4.1.1. Overview of the situation of merger and acquisition of
Vietnamese commercial banks

▪ The situation of merger and acquisition of Vietnam
commercial banks in the period of 1997-2003.
▪ The situation of merger and acquisition of Vietnam
commercial banks in the period of 2004-2010.
▪ The situation of merger and acquisition of Vietnam
commercial banks in the period of restructuring the system of
credit institutions (2011-2015).
▪ The merger and acquisition phase 2 commercial banks
restructuring the banking system (2016 - 2020).
▪ Performance of Vietnamese commercial banks after
M&A
4.1.2. Situation of competitiveness of commercial banks after
the merger and acquisition in Vietnam
4.1.2.1. About financial capacity
The average point of the scale Financial capacity ranges
from 3.32 to 3.52 points. After the M&A activity, the financial
capacity of Vietnamese commercial banks tends to increase, new


16
banks after the restructuring process have improved the
operational efficiency and increased the competitiveness to
contribute to the development of the land economy. country.
4.1.2.2. Regarding technological capacity
The average score of technological capacity is from 3.29 to
3.67 points. The technological capacity of Vietnamese
commercial banks after M&A has not been highly appreciated.
4.1.2.3. About the reputation of the bank
The average score of the rating scale of a bank's credit is
from 3.31 to 3.70. Although the bank's reputation increased

significantly after M&A activities, customers were not really
satisfied and appreciated the bank's products and services. At the
same time, the brand value of commercial banks is not highly
appreciated.
4.1.2.4. About bank service fees
The average point of the evaluation scale of the Bank's
service fee is from 3.37 to 3.59. In order to compete successfully
in the market, many commercial banks have free many types of
services. From this, the content of the survey "The electronic
banking service fee applied at the Bank is reasonable" only
reached a low level of 3.37 points. However, most bankers assess
that the card service fee applied at banks is reasonable (the
content reaches 3.57 points).
4.1.2.5. About the quality of service


17
Average score of the evaluation scale of service quality
from 3.30 to 3.65. The content "Bank always committed to
providing services to customers with good quality" only reached
3.44 points and the content "Procedures of simple banking" only
reached 3.30 points. This is because the level of technology
application in the bank's business activities is not synchronized,
the professional qualifications of the bank staff are still weak and
do not meet the complexity of the list of banks. products and
services.
4.1.2.6. About the transaction network
Average point of the evaluation scale of the trading network
from 3.26 to 3.43. The transaction network of commercial banks
after M&A is limited, which does not create favorable conditions

for customers to access various types of banking services. From
here, directly affect the competitiveness of commercial banks
after M&A.
4.1.2.7. About executive management capacity
Average score of the evaluation scale of executive
management capacity from 3.34 to 3.66. With the current
governance and management capacity, commercial banks after
M&A are still facing big risks, greatly affecting the economy.
This fact requires each and every commercial bank itself after
M&A to constantly improve its governance and management
ability to compete not only with other domestic commercial
banks but also with international credit institutions in the context


18
of integration. International economy and the explosion of
technology revolution 4.0.
4.1.3. General assessment of the current competitiveness of
Vietnamese commercial banks after the merger and
acquisition
4.1.3.1. These achievements
▪ After the M&A activity, the financial capacity of
Vietnamese commercial banks tends to increase.
▪ Business activities are always effective and especially
ensure high system security.
▪ Phần Market share and trading network system is
constantly developing and expanding.
▪ The brand and reputation of banks after M&A are
gradually being increased in the Vietnamese banking system.
▪ Products and services have been oriented to the trend of ebanking development.

▪ After M&A activities, Vietnamese commercial banks
have focused on technology investment to apply and develop
modern banking services to gradually replace traditional banking
services in order to improve competitiveness with banks. foreign
goods and other commercial banks.
4.1.3.2. Limitations and reasons
▪ Technology application at banks has not been updated and
synchronized, banks only pay much attention to deploying
technology application in developing new and modern products


19
and services without paying attention. Using technology software
in administration and management.
▪ Changes in competitiveness are not commensurate with
the amount of investment capital, there are no positive changes
such as products that are not diverse, flexible, technological and
management capacity. The operation has not yet achieved the
optimal efficiency and lack of experience when operating in an
international environment ... making the investment efficiency
low.
▪ Although capital and assets scale increased after
performing M&A activities, the business efficiency of these
commercial banks is still not high, this is a great pressure in the
requirement to improve competitiveness as well as pressure. of
shareholders and affirm the prestige of the bank in the market.
▪ The strategy of products and services in particular and the
competition strategy in general, which has been implemented, has
not been really tight, resolute and effective.
▪ Lack of support from state authorities.

4.2. Analysis of factors affecting the competitiveness of
commercial banks after the merger and acquisition in
Vietnam
4.2.1. Results of assessing the reliability of the scale
Cronbach's Alpha coefficient of all survey scales is greater
than 0.7, the lowest is the measurement scale of the dependent
variable "Competitiveness" with Cronbach's Alpha coefficient =
0.755. This shows that the survey data is completely reliable.


20
4.2.2. Results of exploratory factor analysis (EFA)
Bartlett's test results show that the variables in the
population are correlated with each other (Sig = 0.000 <0.05) and
the KMO coefficient = 0.802 proves that the results of factor
analysis to group the variables together are guaranteed.
Guaranteed reliability.
4.2.3. Pearson correlation test results
The variables are correlated and significant at the 0.01
level. The correlation coefficient of the dependent variable is
relatively high competitiveness of banks and other independent
variables, we can conclude that these independent variables can
be included in the model to consider the influence of these
variables come to the bank's competitiveness.
4.2.4. Regression analysis results
The regression equation is based on the adjusted regression
coefficient as follows:
Competitiveness = 0.287 * Financial capacity + 0.262 *
Technology capacity + 0.320 * Prestige of the bank + 0.281 *
Service fee + 0.266 * Quality of service + 0.193 * Transaction

network + 0.287 * Power executive management force.


21
Table 4.1. Regression analysis results
Model
1

R

R Square

Adjusted
R Square

Std. Error of
the Estimate

DurbinWatson

.840a

0.706

0.699

0.26572

1.976

F

Sig.

95.346

.000b

t

Sig.

VIF

-1.911

0.057

ANOVA
Sum of Squares

df

Regression

47.125

7

Mean

Square
6.732

Residual

19.629

278

0.071

Total

66.754

285
Regression coefficient

(Constant)
Financial
capacity
Technology
capacity
Prestige of
the bank
Service fee
Transaction
network
Transaction
network

Power
executive
managemen
t force

Unstandardized
Coefficients

Standardized
Coefficients

B

Beta

-0.278
0.167

0.287

8.667

0.000

1.035

0.153

0.262

7.928

0.000

1.035

0.175

0.320

9.768

0.000

1.017

0.155

0.281

8.524

0.000

1.030

0.152

0.266

8.048

0.000

1.030

0.095

0.193

5.867

0.000

1.025

0.168

0.287

8.573

0.000

1.057

Source: Research results of the author


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CHAPTER 5
CONCLUSIONS AND SOLUTIONS

5.1. Conclusions
The research results show that the most influential factor of
the factors affecting "Competitiveness" of commercial banks
after M&A is the factor "Reputation of the bank" with Beta =
0.320. Next are the factors "Financial capacity" and "Executive
capacity" with the same Beta = 0.287. The fourth influencing
factor is the "Service fee" with beta = 0.281. The fifth influencing
factor is "Service Quality" with Beta coefficient = 0.266. The
sixth factor of influence is “Technology capacity” with
coefficient of Beta = 0.262. The lowest factor affecting the
"Competitiveness" of the bank is the "Transaction network" with
the coefficient of Beta = 0.193.
5.2. Solutions to improve the competitiveness of commercial
banks after M&A
From the results of research on factors affecting the
competitiveness of Vietnamese commercial banks after M&A,
based on the current competitiveness of 8 commercial banks after
M&A through analyzing the average score of Mean of each scale
and the Beta of 7 factors, the author gives some suggestions to
improve the competitiveness of Vietnamese commercial banks
after M&A as follows:
▪

Improve financial capacity.


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▪
▪
▪
▪
▪
▪
▪

Improve technology capacity
Improve management and administration capacity
Improve service quality and Promote customer care
Expanding and diversifying banking services
Improving the quality of human resources
Improve the position and reputation of the bank.
Develop an appropriate trading network system.

5.3. Limitations of the research and subsequent research
directions
Regarding the scope of research space: the author only
studies 8 typical commercial banks that have participated and
succeeded in M&A deals in Vietnam (SHB, HDBank, SCB, LPB,
PVcombank, Sacombank, BIDV, Maritimebank). As a result, the
number of samples used for survey is small (286 people), so
subsequent studies can choose to study on all commercial banks
in Vietnam with a larger sample size for evaluation and
measurement. measure the competitiveness of Vietnamese
commercial banks.
Due to limitations in professional qualifications, the author
has only introduced 7 internal factors (financial capacity,
technological capacity, transaction network, service fee, bank

reputation, service quality , executive management capacity) to
evaluate and measure the impact on the competitiveness of
Vietnamese commercial banks after M&A.
Due to the limited time and experience in conducting
research, compared to the large scale, the number of officials and