Banks seek foreign capital, but not foreign strategic shareholders

Some Vietnamese banks have revealed they are negotiating with foreign partners on capital contributions. 

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Some Vietnamese banks are seeking foreign investors

Dang Khac Vy, chair of LienViet Post Bank, said at a shareholders’ general council meeting last week that the bank is talking with five foreign investors based in the US, EU and Japan about the sale of treasury stocks. “It is now the time to sell treasury stocks. Many foreign banks and investment funds are eyeing Vietnam. They are really interested in making investments here,“ Vy said.

Former chair of the bank Nguyen Duc Huong revealed on the sidelines of the meeting that a Norwegian investment fund is willing to buy LienViet Post Bank shares at over VND30,000 per share. However, no official decision has been made. In mid-March, VP Bank’s leadership announced a plan to issue shares to specific foreign and domestic shareholders. The amount of shares to be issued would be 15 percent of the bank’s common stocks. VP Bank reported that 1.57 billion had been in circulation by December 31, 2017. 

Strategic partners

Nguyen Tri Hieu, a renowned banking expert, said that many foreign strategic investors have divested from Vietnamese banks recently.

In mid-March, VP Bank’s leadership announced a plan to issue shares to specific foreign and domestic shareholders. The amount of shares to be issued would be 15 percent of the bank’s common stocks. VP Bank reported that 1.57 billion had been in circulation by December 31, 2017. 

In early 2018, BNP Paribas withdrew all of its capital contribution from OCB. However, it is still unclear about the buyer of the 74 million shares. BNP Paribas was a strategic investor, which initially held 10 percent of OCB shares in 2007, and raised the ownership ratio to 20 percent in 2011.

Also in early 2018, Standard Chartered terminated its role as the strategic investor which it had been holding for the 12 years in ACB.  The Vietnam Securities Depository confirmed that the two biggest shareholders —Standard Chartered APR Ltd and Standard Chartered Bank (Hong Kong) Limited — have transferred all 154 million shares.

In 2017, HSBC withdrew capital from Techcombank after 12 years of investment. In 2012, ANZ left Sacombank. “Investment funds have capital from separate investors. When buying into banks, they don’t intend to join the management board of the banks, but just want to make investments to seek profit,” Hieu said. “Vietnam’s macroeconomic indicators are very good, thus attracting foreign investment funds,” he said.

Official reports show that foreign investors have been the major buyers of Vietnam’s stocks recently. Techcombank’s management board plans to sell treasury stocks to foreign/domestic investors in the second phase. Prior to that, the bank announced investment of $370 million from two legal entities managed by Warburg Pincus.

Kim Chi

Source: VietNamNet

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