Malayan Banking Bhd (Maybank) has proposed to buy 15% of the charter capital of Vietnam’s An Binh Bank (ABBank) for RM430mil cash.
Maybank has the option of increasing the stake up to 20%, subject to approval from the Vietnamese Government.
Maybank said in statement that on completion of the deal, it would emerge as a major shareholder of ABBank.
Currently, the biggest shareholder is The Electricity of Vietnam Group (EVN), with 28.3%. The other major shareholder is The Hanoi Export-Import JSC, which holds 7.2%.
ABBank, set up in 1993, is one of the fastest growing joint-stock commercial banks in Vietnam. Its assets expanded from US$42 million in December 2005 to over US$700 million at end-December 2007.
It has 53 branches and transaction offices across 21 provinces and cities in Vietnam. It plans to increase the number of branches to at least 150 in 2010.
Besides commercial banking, it also has a growing consumer banking market share in mortgage, motor vehicle financing and personal loan.
Maybank chairman Tan Sri Mohamed Basir Ahmad and his counterpart at ABBank Vu Van Tien signed the sale agreement in HCM City yesterday.
“The rapidly growing small and medium-scale enterprises sector in Vietnam presents huge potential to introduce more innovative financial products and services,” Basir said in the statement.
The venture would also provide opportunities to tap the customer base of ABBank and EVN, he said.
ABBank has strong established payment centres for EVN customers and provides financial services to EVN’s business partners and suppliers. EVN and EVN Telecom have 80,000 employees and over 12 million customers.
Maybank and ABBank also forged a strategic cooperation and knowledge transfer agreement yesterday.
Maybank will be sharing knowledge in improving corporate governance and internal controls as well as technical assistance in consumer banking, network, treasury, business banking, risk management, human resource and information technology.
Vietnam is the second fastest growing economy after China, driven by rising domestic consumption, trade expansion and investments. Vietnam’s gross domestic product had been growing at above 8% for the past three years.
Maybank has an existing presence in the country with branches in Hanoi and HCM City.
It has seen strong growth in the Vietnam operations, which registered loans and deposits growth of 29% and 42% respectively year-on-year as at February.
MIMB Investment Bank head of research Pong Teng Siew said although the 15% stake was relatively small, it would provide the platform for Maybank to further expand its presence in Vietnam.
OSK Investment Bank analyst Chan Ken Yew said Vietnam was still quite new in terms of commercial banking and, coupled with the huge portion of young population, there would be much opportunities to tap into.