State-run BIDV, the country's second-largest lender by assets, on July 22 announced it would offer 603.3 million of shares, or 15% of stake worth VND20.29 trillion (US$868 million) in a private placement to South Korea’s KEB Hana Bank, a subsidiary of South Korea’s Hana Financial Group.
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Foreign ownership in a Vietnamese bank is capped at 30%. A foreign investor is allowed to hold up to a 15% stake in a local bank while the room for a foreign strategic investor is set at 20%.
BIDV is one of Vietnam's four major government-run commercial banks. It staged an initial public offering (IPO) in 2011 and listed its stock on the Ho Chi Minh City Stock Exchange in 2012.
KEB Hana Bank, together with its subsidiaries, provides commercial banking, trust banking, foreign exchange, and merchant banking services to retail and corporate customers in South Korea and around the globe.
On January 5, the chairman of KEB Hana Bank met with the Deputy Prime Minister Vuong Dinh Hue, emphasizing the cooperation between Hana Bank and BIDV.
The stake sale is the latest large investment by a South Korean firm in the Southeast Asian country, after conglomerate SK Group in May agreed to buy a 6.1% of Vietnam’s largest firm Vingroup for US$1 billion.
Hana Financial said in a regulatory filing that the purchase of the BIDV stake will facilitate its entry into the Vietnamese market and secure sources for its mid- to long-term growth, according to Reuters.
Vietnamese banks need as much as US$20 billion in the run-up to the adoption of Basel II standards, scheduled for January 1, 2020, Fitch Ratings said in a note last week.
Vietnam’s Military Commercial Joint Stock Bank said last week it was seeking to sell a 7.5% stake to one or more foreign investors this year.
