Friday, 22 Mar 2019

Foreign investors target Vietnamese bank shares

Updated at Saturday, 09 Jun 2018, 08:05
The Hanoitimes - Positive policy changes and improved bad debt resolution are making Vietnam’s banking industry become more attractive to foreign investors, experts have said.
Two funds Whistler Investments Limited and Sather Gate Investments Limited, wholly owned by Alp Asia Finance Vietnam Limited, have recently become major shareholders at Hanoi-based Asia Commercial Bank (ACB).
Foreign investors paid US$300 million for a 21.5% stake in HDBank.
Foreign investors paid US$300 million for a 21.5% stake in HDBank.
A filing to Hanoi Stock Exchange showed that Alp Asia Finance Vietnam Limited through the two funds is holding a total of 102.2 million shares of ACB, equivalent to a 9.95% stake. Each fund holds more than 51.1 million shares of ACB, equivalent to 4.97 percent stake. The transaction value was approximately VND5 trillion (US$220 million).
Besides the two funds belonging to Alp Asia Finance, three other funds also bought ACB shares, namely Estes Investments Limited (38.5 million shares), Boardwalk South Limited (154,100 shares) and Estes Investments Limited (12.7 million).
Prior to that, in March, Dragon Capital Markets Ltd divested all of its 7 million ACB shares (0.71%), while Dragon Financial Holdings Ltd bought a similar amount of shares, raising its total shares owned to 70 million (7.1%).
As for Techcombank, after the withdrawal of HSBC, two funds managed by Warburg Pincus committed to pour US$370 million into the bank.
Earlier, HDBank had sold stakes to more than 76 foreign investors before its listing. The investors include some familiar big names like VinaCapital, Dragon Capital, Deutsche Bank AG, JPMorgan Vietnam Opportunities Fund and financial institutions like CAM Bank (Japan), RWC Frontier Markets Opportunity Master Fund (UK), Macquarie Bank (Australia), and Charlemagne (UK).
HDBank’s partner in the consumer finance division, Credit Saison (Japan), also bought a stake. The investors paid a total of US$300 million for a 21.5% stake in HDBank.
Finnish independent fund management company PYN Fund Management recently completed acquisition of a 4.99% stake in TPBank for US$40 million, marking its largest investment yet in Vietnam.
IFC, the private investment arm of the World Bank, has also become a shareholder of TPBank with a 4.9% stake.
TPBank Chairman Do Minh Phu has said the bank plans to sell a 15% stake through a private placement to some investors. Its charter capital is expected to increase to VND8.5 trillion, or US$372 million from the current VND5.84 trillion.
Chair of OCB Trinh Van Tuan said the bank is seeking foreign strategic shareholders before listing shares on the Ho Chi Minh Stock Exchange (HOSE). The foreign ownership ratio ceiling set by the bank is 23.6%, while the current ratio is 4.9%.
Supporting factors
According to analysts, the government is making policy changes that would help the industry overcome its limitations in technology, capital and management, making foreign investors feel secure.
Banking expert Bui Quang Tin said that the State Bank of Vietnam has requested commercial banks to meet Basel II standards by 2020, while the amended law of the 2017 Law on Credit Institutions includes at least 17 new provisions in governance. With these big changes, foreign investors are now more interested in bank shares.
The improvement in bad debt settlement is also expected to help banks increase their revenues, Tin said, adding that banks have more opportunities to resolve non-performing loans ahead thanks to the warming of the real estate market as most of these debts are backed by real estate assets.
Besides, foreign investors also recognize the potential of Vietnam’s financial market, especially on mobile platforms, since the country has 53 million mobile subscribers and 40 million Internet users.
Anh Hong
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