Japan's SMBC acquires 15% stake in VPBank for US$1.5 billion

Mar 27, 2023 / 08:48 PM

The agreement surpasses the VND20 trillion ($850 million) acquisition of a 15% stake in BIDV from KEB Hana Bank (South Korea) in 2019, setting a new record in the banking industry.

VPBank announced that it has completed the sale of a 15% equity interest to Sumitomo Mitsui Banking Corp. of Japan, a member of Sumitomo Mitsui Financial Group, in a transaction valued at $1.5 billion.

CEO of SMBC Masahiro Yoshimura and Chairman of the Board of Directors at VPBank Nguyen Chi Dung at the signing ceremony today. Photo: VPBank

SMBC Group's latest deal with VPBank makes the former a new strategic investor in the latter.

The agreement sets a new banking industry record, with a deal value of VND35.9 trillion ($1.5 billion), surpassing the VND20 trillion ($850 million) acquisition of a 15% stake in BIDV from South Korea's KEB Hana Bank in 2019.

The investment is expected to increase VPBank's total capital from VND103.5 trillion ($4.4 billion) to around VND140 trillion ($5.95 billion), positioning VPBank as the second largest bank in the industry after Vietcombank.

In order to strengthen its financial capacity and achieve its growth target over the next five years, VPBank has been implementing a capital increase plan since 2022. The capital increase will not only improve the Capital Adequacy Ratio (CAR), but will also expand the lending limits to individual customers or groups.

SMBC's strategic investment in VPBank is expected to attract FDI and encourage multinationals and large enterprises to explore and expand investment in Vietnam.

The partnership is also expected to accelerate digital transformation, as SMBC will contribute to VPBank's growth by sharing its knowledge and experience in various Asian markets.

SMBC and VPBank are not new partners, as in early 2021, SMBC Consumer Finance acquired a 49% stake in FE Credit, a subsidiary of VPBank, for $1.37 billion.

Although a strategic shareholder of Eximbank since 2007, SMBC reduced its stake to 4.27% due to unresolved disputes.

KEB Hana Bank, BIDV close biggest M&A deal in Vietnam’s banking industry

12 Nov, 09:40

This is the first acquisition by a foreign financial institution of a considerable stake of a Vietnamese bank in many years.

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