Many foreign investors want to invest tens of trillion dong into Vietnamese banks, including weak banks in the process of restructuring including: Construction Commercial One Member Limited Liability Bank (CBBank), Ocean Commercial One Member Limited Liability Bank (OceanBank), Global Petro Sole Member Limited Commercial Bank (GPBank), etc.
Recently, Han Chang-woo, Chair and Chief Executive Officer (CEO) of Maruhan Group (Japan), expressed his desire to receive the support of the government of Vietnam in the process of participating in restructuring Oceanbank. Another major Japanese bank, J.Trust, wants to buy CBBank. Clermont Group (Singapore) also wants to participate in restructuring CBBank. GPBank was negotiated to buy by foreign investors.
Previously, there were many foreign investors who wanted to buy these three banks, even went to the final round of negotiations. However, regulations on Vietnamese bank ownership are still difficult for investors, as in the case of UOB wanting to repurchase 100 percent of GPBank’s capital.
At the meeting of leaders of Korean banks and financial companies in Seoul (South Korea) recently, deputy prime minister Vuong Dinh Hue said that in the near future, the government of Vietnam advocated not granting more licenses to 100 percent foreign-owned banks, but encouraged foreign banks to buy weak banks. This meant that foreign investors could buy controlling shares for Vietnamese banks, even owning 100 percent of weak bank capital.
According to the report of Bao Viet Securities Joint Stock Company (BVCS), there were not many banks remaining in foreign ownership cap. HCM City Development Joint Stock Commercial Bank (HDBank), Vietnam Prosperity Joint-Stock Commercial Bank (VPBank), Vietnam Technological and Commercial Joint-Stock Bank (Techcombank) successfully sold shares to international organisations, earning hundreds of millions dollars. Asia Commercial Joint Stock Bank (ACB) quickly found a new partner when the Alp Asia Finance Limited group was transferred and officially became a major shareholder with nearly 10 percent of ACB’s capital.
In addition, Orient Commercial Joint Stock Bank (OCB), Nam A Commercial Joint Stock Bank (Nam A Bank) have demand to attract more foreign capital before listing shares on HCM City Stock Exchange (HOSE) this year, when foreign shareholding ratio threshold of banks remains 30 percent. Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) asked shareholders for the increase of charter capital through private equity issuance to foreign strategic investor KEB Hana with 17.65 percent of charter capital. With foreign shareholding ratio threshold at about 10 percent, Vietnam International Commercial Joint Stock Bank (VIB) also planned to attract more foreign capital in the plan to increase capital.
Some banks still have foreign ownership cap, such as Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank), Sai Gon Joint Stock Commercial Bank (SCB), Southeast Asia Commercial Joint Stock Bank (SeABank), DongA Joint Stock Commercial Bank (DongA Bank), Bac A Commercial Joint Stock Bank (Bac A Bank), Viet Capital Commercial Joint Stock Bank (Viet Capital Bank), Vietnam Maritime JointStock Commercial Bank (MSB), Kien Long Commercial JointStock Bank (Kienlongbank), Nam A Bank, National Citizen Commercial Joint Stock Bank (NCB), Vietnam Thuong Tin Commercial Joint Stock Bank (Vietbank), etc., however, they are in the restructuring phase and seek to invest more foreign capital later.
There are still many foreign investors who believe in domestic banks. For example, MUFG (Japan), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank)’s strategic partner, wants to add more capital and increase its ownership in this bank.
In the context that domestic banks, including big institutions like VietinBank and BIDV, are facing pressure to raise capital to meet Basel II standards, they also want to extend foreign shareholding ratio threshold to a maximum of 40-45 percent. Dominic Scriven, Chair of Dragon Capital, said that the Vietnamese government could loosen foreign ownership cap from 30 percent to 49 percent, creating conditions for many banks to raise capital mobilisation under Basel II standards.
Masataka “Sam” Yoshida, Global director of Transnational M&A service of RECOF Corporation, said that M&A activities in the financial and banking sector were expected to have many positive results in the future. Business performance of domestic banks had been significantly improved and the State Bank of Vietnam’s regulations on capital standards under Basel II Agreement had been applied since 2020.
