Business

IFC seals convertible loan of 57 million USD to VPBank

The International Finance Corporation (IFC), a member of the World Bank Group, recently approved a convertible loan of 57 million USD to the Vietnam Prosperity Joint-Stock Commercial Bank (VPBank).
IFC seals convertible loan of 57 million USD to VPBank ảnh 1The IFC loans of 57 million USD to VPBank would help the bank ontinue expanding its lending to micro, small, and medium enterprises. (Photo: vpbank.com.vn)

Hanoi (VNA) – The International Finance Corporation (IFC),a member of the World Bank Group, recently approved a convertible loan of 57million USD to the Vietnam Prosperity Joint-Stock Commercial Bank (VPBank).

The two-year loan term, which can be extended for two additionalyears, will help VPBank expand its lending scope to small- and medium-sizedenterprises (SMEs), a strategic and focal segment of VPBank.

According to the agreement, IFC has the right to convert theprincipal balance to VPBank’s common shares during the loan term. At present,VPBank is completing legal procedures for this convertible loan.

“IFC’s long-term financing will help VPBank move closer towardsits goal of becoming a leading small-and-medium sized bank in Vietnam,supporting the private sector’s development and contributing to economicgrowth,” Lam Bao Quang, acting IFC country manager for Vietnam, Cambodia andLaos, said.

“Thanks to IFC’s investment, VPBank can enhance its reputation andbrand value through IFC’s supervision and technical support in corporategovernance, especially risk management,” CEO Nguyen Duc Vinh said, reiteratingthat this loan provided VPBank with medium-term capital for foreign-currency loans.

He added that it also contributed to VPBank’s charter capital tomeet capital requirements and strengthen capital adequacy ratio, followingBasel II in case IFC implements its right to convert the loan to shares.

Basel II is a new, higher level for Vietnamese banks in accordancewith Basel Accords standards set by the Basel Committee on Banking Supervision(BCBS). The application is flexible to different countries but the overallspirit is tighter regulations on banking operations.

In 2016 and early 2017, IFC also provided VPBank with a five-yearfinancial package of 158 million USD and trade guarantee lines of up to 50million USD. This helped VPBank to continue expanding its lending to micro,small and medium enterprises, especially women-owned enterprises, and boostinternational trade opportunities.-VNA
VNA
#International Finance Corporation #convertible loan of 57 million USD #Vietnam Prosperity Joint-Stock Commercial Bank #lending scope #SMEs #economic growth
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