A transaction office of Vietcombank (Photo: VNA) Hanoi (VNA) – Tens of trillions of VND is expected tobe poured into Vietnamese banks by foreign investors in 2019 and 2020 asnegotiations on many deals are running smoothly.
After successfully selling 3 percent of itscapital to foreign investors to gain 6.2 trillion VND (nearly 266.4 millionUSD) in late 2018, the Joint Stock Commercial Bank for Foreign Trade of Vietnam(Vietcombank) is promoting the sale of another 6.5 percent from now to 2020.
Vo Viet Hung, head of the board for capitalincrease at Vietcombank, said the roadmap for the 6.5-percent stake sale is awaitingthe approval of the State Bank of Vietnam (SBV) as well as relevant ministriesand sectors.
Many foreign investors are planning to pourmoney into this bank, which posted the highest profit in Vietnam. Notably, GIC,an investment fund of the Singaporean Government, has expressed its intentionto continue bidding for Vietcombank shares after purchasing 2.55 percent ofthis bank’s capital last year.
Hung said the stake offering has been rathersmooth so far since a number of foreign investors have shown their interest.
Meanwhile, the Joint Stock Commercial Bank forInvestment and Development of Vietnam (BIDV), another major bank, isnegotiating the sale of part of its capital to KEB Hana Bank of the Republic ofKorea.
Chairman of BIDV’s Board of Directors Phan DucTu said procedural problems have been handled, but the two sides haven’treached consensus on the price issue. If successful, this will be one of thelargest transactions in the market.
Not only major banks, poor-performing ones arealso attracting great attention from foreign investors.
At a recent meeting with Prime Minister NguyenXuan Phuc on the sidelines of the G20 Summit in Osaka, Senior Managing Directorand Executive Officer of Japan’s J Trust Co. Ltd Nobiru Adachi said his firmhas expressed its interest in purchasing the Vietnam Construction Bank (CB) ina document sent to the SBV after considering financial statistics ofthe CB.
J Trust believes that in a short period of time,it will help restructure the CB successfully and regain the previous stature ofthis bank, Nobiru Adachi noted.
According to the SBV, it has submitted to thePrime Minister a plan on the transfer and restructuring of OceanBank afterselling this bank to a foreign investor. However, the name of this investor hasnot been revealed.
The National Financial Supervisory Commissionsaid aside from J Trust, other foreign investors like Srisawad Corporation ofThailand and Clermont of Singapore have expressed the wish to purchase or takepart in the restructuring of poor-performing banks and credit organisations inVietnam.
Financial experts said there are many factors thatdirect investors’ interest in poor-performing banks, including the good growthof Vietnam’s economy and improving performance of local banks. Additionally,the Government has declared that it won’t license the establishment of foreigninvested banks until the end of 2020 in order to focus on dealing with domesticpoor-performing banks and connecting with foreign investors.
Economist Can Van Luc noted there are signsindicating the recovery of bank mergers and acquisitions (M&As). He addedapart from ailing or big banks, many other joint stock banks such as SHB, NCBand OCB are also seeking foreign partners.
Meanwhile, Dr Bui Quang Tin, CEO of the BizLightBusiness School, said the pressure of complying with Basel II capitalrequirements from now to 2020 will make many banks face the M&A problem.
Furthermore, under the strategy for developingthe Vietnamese banking sector until 2025, the State will reduce its ownershipat State-owned banks. That will make the banking M&A market even morevibrant in the time ahead, Tin said.-VNA
VNA
