The State Bank of Vietnam (SBV) has given the green light to a merger between Sacombank and unlisted Phuong Nam (Southern) Bank, it said in an announcement sent to local lenders on Monday.

The merged bank is still named Sacombank and the merger will enable the partly private lender to enter the list of the top five largest Vietnamese banks by assets, with the total asset of nearly VND290.9 trillion (US$13 billion).

Following the merger, Sacombank will have an equity of VND22.64 trillion ($1.01 billion) and a charter capital of VND18.85 trillion ($841.52 million), plus a network of 567 transaction points across Vietnam, and in Laos and Cambodia.

The other four major lenders are Agribank, Vietcombank, VietinBank, and BIDV.

Sacombank and Southern Bank, both based in Ho Chi Minh City, had earlier received approval from their shareholders for the merger, which was put under consideration in March 2014.

Sacombank shareholders were then concerned that the merger would bring more troubles than benefits, but eventually voted in favor of the plan.

The merger between Sacombank and Southern Bank complies with the SBV’s restructuring of the banking sector, which is intended to “bring stronger, safer and more professional financial entities to the market,” it said in the Monday document.

Tram Be, a well known banking tycoon who is deputy chairman of Sacombank, will no longer join the administration board of the merged bank, according to the central bank.

Southern Bank was established in 1993 with a charter capital of VND10 billion ($446,429), which rose to VND4 trillion ($178.57 million) after 22 years, according to newswire VnExpress.

The bank, however, had run into troubles in the past couple of years, with nonperforming loans rising against falling profits.

In 2013 the lender posted a mere VND18 billion ($803,571) in pretax profit, and only VND17 billion ($758,929) a year later.

In the meantime, Sacombank was founded in 1991 and has seen its charter capital jump to VND12.42 trillion ($554.46 million) from the initial VND3 billion ($133,929).

The bank’s annual pretax profit always revolves around VND3 trillion ($133.93 million).