More foreign banks buy into Vietnam
30-JUL-2008 Intellasia | FinanceAsia.com
Jul 30, 2008 - 7:00:00 AM
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UOB increases its investment in Southern Commercial Joint Stock Bank, while SG receives approval to buy a stake in Southeast Asia Commercial Joint Stock Bank. The State Bank of Vietnam, which is the nation's central bank, has approved the purchase of a 5% stake in Phuong Nam (Southern) Commercial Joint Stock Bank by the United Oversea Bank (UOB) of Singapore, its foreign strategic shareholder. The purchase price was not disclosed.
The purchase will increase UOB's holding in Southern Bank to 15% from the current 10% that UOB bought in December 2007 for Vnd480 billion (US$30 million). A 15% stake is currently the maximum amount that a foreign strategic investor is allowed to hold in a domestic financial institution in Vietnam.
Southern Bank was established in 1993 with an initial charter capital of Vnd10 billion. The HCM City-based bank hopes to double its charter capital to Vnd3 trillion this year. The bank has a network of 84 branches and transaction offices, and total assets of Vnd18 trillion.
UOB is one of Singapore's leading banks and provides diversified financial services via 524 branches and subsidiaries in 18 nations worldwide.
In a separate move, the central bank governor has given approval to the Southeast Asia Commercial Joint Stock Bank (SeABank) to sell a 15% stake to its French strategic partner Societe generale.
SG is expected to help SeABank improve its risk management, technology, international payment services, to develop its human resources and boost its consumer services. The deal is expected to be signed shortly. However, the value of the 15% stake has not been disclosed.
The price of SeABank's shares on the over-the-counter (OTC) market ranged from Vnd18,000 to Vnd20,000 each last week.
Currently, several big foreign lenders hold a 15% stake in their respective Vietnamese partners, including HSBC in Techcombank, Standard Chartered in ACB, Sumitomo Mitsui Bank in Eximbank, and Maybank in ABBank. Some are seeking to raise their ownership to 20%. -By Lara Wozniak
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