Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and Korean Exchange Bank (KEB Hana Bank) had completed transaction procedures and legal documents under the laws of the two countries so that KEB Hana Bank officially became the first foreign strategic shareholder of BIDV. Specifically, BIDV issued privately to KEB Hana Bank more than 603.3 million shares with a total transaction value of nearly 20.3 trillion dong. After issuing shares to KEB Hana Bank, BIDV’s charter capital increased from 34.187 trillion dong to 40.22 trillion dong, the highest in the Vietnamese banking system.
That was a dual transaction and a Mergers and Acquisitions (M&A) one with the most significant strategic investor in Vietnam’s banking industry. KEB Hana Bank invested to own 15 percent of BIDV’s shares with a holding period of at least five years. At the same time, BIDV received a long-term technical assistance programme from Hana Financial Group and KEB Hana Bank, including but not limited to six following areas: strategic management of banking development; technology system management and digital banking; strengthening retail banking development; diversify profitable asset portfolios; risk management; training and developing human resources.
Speaking at the ceremony, Nguyen Thi Hong, deputy Governor of the State Bank of Vietnam (SBV), affirmed that the cooperation between the two leading financial institutions of the two countries not only benefited the two banks but also brought mutual advantages to the business community of Vietnam and Korea. KEB Hana Bank’s large-scale regional investment in Vietnam was a clear demonstration of optimism and confidence in the stability and development potential of Vietnam’s economy, in the finance and banking industry in general and BIDV in particular.
Would KEB Hana Bank increase its presence in Vietnam?
Talking about the acquisition of BIDV shares, Ji Sung Kyu, CEO of KEB Hana Bank, said that the investment deal in BIDV of KEB Hana Bank was the first strategic investment project of a Korean bank in Vietnam. Not only in commercial banking activities, KEB Hana expected that the combination of the two sides would also create synergy in many other areas, such as cards, securities, capital, insurance, and fin-tech.
Ji Sung Kyu also hoped that KEB Hana Bank becoming a strategic investor of BIDV would be a stepping stone to help diversify strategic investment projects and enhance cooperation between financial institutions of the two countries in the future.
According to Phan Duc Tu, Chair of BIDV Board of directors, the strategic cooperation with Hana Financial Group had a special meaning with BIDV, which was an important milestone in the process of formation, development and international integration of BIDV. With the cooperation and long-term strategic support of KEB Hana Bank, Hana Financial Group, which was a financial institution with outstanding management capacity and successful experience in Korea and many countries around the world, BIDV would have the opportunity to fundamentally change the governance model, improve the governance capacity; risk management; develop modern products and services, high technology content; enhance competitiveness, better meet the needs of products and utilities of customers, contribute to national construction and development.
This cooperation announcement event not only marked a new turning point in the operation history of BIDV, the oldest commercial bank in Vietnam, but also marked an important step in the cooperation between BIDV and KEB Hana Bank. At the same time, it contributed to affirming the relationship of development between leading enterprises in Vietnam and Korea in an effort to further promote economic and diplomatic relations between the two countries.
