Vietinbank to sell 15 percent stake

Vietinbank has fast-tracked negotiations to sell a 15 percent stake to the Bank of Nova Scotia in a deal expected to finalise in the third quarter of this year, Vietinbank chairman Pham Huy Hung told reporters in Hanoi on Jan. 25.
Vietinbank has fast-tracked negotiations to sell a 15 percent stake tothe Bank of Nova Scotia in a deal expected to finalise in the thirdquarter of this year, Vietinbank chairman Pham Huy Hung told reportersin Hanoi on Jan. 25.

The International Finance Corporation (IFC),the financial arm of the World Bank, also announced on Jan. 25 that itwould invest 182 million USD in a 10-percent stake in Vietinbank,pursuant to an agreement signed last October.

"I believe that theIFC's financial and advisory support will help us carry out ourexpansion and modernisation strategy and improve access to finance forsmall- and medium-sized enterprises," Hung said.

As a strategicpartner, the IFC was committed to providing Vietinbank with advisoryservices in the areas of corporate governance, risk management, energyefficiency and information technology.

The IFC also agreed onJan. 25 to make a subordinated loan of 125 million USD to Vietinbank.The loan, at an annual rate of six-month Libor plus 1.5 percent, wouldmature in 2021.

"The borrowing rate is very favourable," said Hung. "The credit meets all criteria to be considered second-tier equity."

TheState currently holds 80 percent of equity in Vietinbank, while the IFCholds 10 percent and domestic investors, also 10 percent.

Vietinbank– the third largest bank in Vietnam by credit market share and fourthlargest by stock market capitalisation – expects to double its chartercapital over the next 10 years, from 15.17 trillion VND (757.46 millionUSD) to 30 trillion VND (1.5 billion USD).

Vietinbank shares, coded CTG on the HCM Stock Exchange, closed down 3.4 percent on Jan. 25 to 22,600 VND per share./.

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