Recently, domestic banks tend to sell capital to many foreign organisations. This shows that, in addition to capital, banks expect the investors to cooperate in the long-term development strategy, instead of normal financial investment.
Sharing with Securities Investment Newspaper, Orient Joint Stock Commercial Bank (OCB) leader said that the bank would fix foreign shareholding ratio before listing on the stock market this year. OCB Board of directors had approved the foreign ownership limit of 23.66 percent. Currently, VinaCapital was the largest foreign shareholder at OCB with the ownership rate of five percent.
Previously, OCB broke up with strategic partner BNP Paribas (France) when this foreign investor withdrew more than 74,705 million OCB shares, equivalent to 18.68 percent of capital. BNP Paribas became a strategic shareholder of OCB from February 22, 2008 with initial ownership of 10 percent of capital. At that time, the trend of combining internal and external strategic partners in the banking industry was very vibrant. After three years, BNP Paribas raised its ownership rate to 20 percent.
“During the negotiation process to finalise the sale of shares to foreign investors this time, OCB wishes to find a strategic investor to work with the Bank in the long term, instead of merely attracting capital to increase its financial capacity “, OCB leader said.
With Nam A Joint Stock Commercial Bank (Nam A Bank), in the plan to increase capital to five trillion dong this year, there is a content to attract more capital from foreign strategic shareholders. According to Tran Ngoc Tam, general director of Nam A Bank, this is a necessary issue for the Bank to improve its competitiveness. Currently, Nam A Bank is in the process of negotiating with investors.
Talking to reporters, general director of a joint stock bank also said that after the restructuring period, the bank planed to sell capital to foreign investors. Although, managers gave “green light” so that foreign investors could own more than the prescribed level (30 percent of capital), but the search was not easy to carry out in a short time.
In fact, not all foreign investors are attached to the bank for a long time but will end when the cooperation period expires, or when the cooperation is no longer as expected. Recently, SeABank has confirmed that foreign strategic shareholder Societe generale had fully withdrawn its ownership after 10 years. Societe generale invested in SeABank since 2008 and increased its ownership to a maximum of 20 percent.
Not only SeABank, in the past two years, five foreign investors have divested from domestic banks. However, the attraction of Vietnamese banks is still great for foreign investors.
The movement of “seeking foreign partners” of domestic banks started more than a decade ago, especially in the period of 2005-2011, with the opening of three cooperation deals in 2005 between Asia Joint Stock Commercial Bank (ACB) and Standard Chartered, Vietnam Technological and Commercial Joint Stock Bank (Techcombank) and HSBC, Saigon Thuong Tin Joint Stock Commercial Bank (Sacombank) and ANZ.
However, at present, instead of “wholesaling” as before, many banks sell “retail” capital to foreign investors. For example, in the recent private placement, Tien Phong Joint Stock Commercial Bank (TPBank) attracted many investors both at home and abroad, collecting over 2.19 trillion dong. At ACB, while Standard Chartered Bank ended its strategic investor role at the beginning of this year after more than 12 years of cooperation, Alp Asia Finance Limited has become a major shareholder with nearly 10 percent of equity.
Prior to listing in early 2018, Hochiminh City Development Joint Stock Commercial Bank (HDBank) attracted many foreign investment funds and banks to buy shares such as Credit Saison (Japan), Aozora Bank (Japan), Deutsche Bank AG (UK), JPMorgan Vietnam Opportunities Fund ( Anh), Dragon Capital (UK), RWC Frontier Markets Opportunity Master Fund (UK), Chalemass (UK), Macquarie Bank (Australia)… These investors have spent about $300 million (over 6.8 trillion dong) in the private offering of 14.26 million shares, equivalent to 20 percent of ownership, in which each investor owns no more than three percent.
Techcombank sold a $370 million stake to two investors, Vesta VN Investments B.V and COG Investments B.V (Netherlands), before listing at the beginning of June 2018. These are two funds managed by Warburg Pincus.
The plan to attract foreign capital of Vietnamese banks is gradually being promoted to improve competitiveness, especially when the capital raising pressure is up to Basel II standard. Meanwhile, foreign investors are also willing to support. general director of Mitsubishi UFJ Financial Group (MUFG) said that the bank was ready to support Vietnam Joint Stock Commercial Bank of Industry and Trade (Vietinbank) to increase its capital and desired to be supported by the government. Vietcombank wants to increase foreign ownership ratio to the maximum, compared to the current rate of 20.79 percent.
