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Singaporean bank to buy additional 5 percent in local lender
Singapore’s Oversea-Chinese Banking Corp. is applying to increase its stake in the Vietnam's VP Bank to 15 percent, the maximum amount that a foreign investor may own in a Vietnamese bank.
The application to the State Bank of Vietnam would be completed this month, said Le Dac Son, general director of the Vietnamese partner, known fully as the Vietnam Joint-Stock Commercial Bank for Private Enterprises.
Vietnam limits total foreign ownership in domestic banks to 15 percent, with a 10 percent cap for any individual investor.
But the government has said that in exceptional cases it would allow a foreign strategic investor to own 20 percent.
The Singaporean lender, known as OCBC, would pay 4-5 times more than the face value of the VP Bank shares to acquire the additional stake, Son added.
Singapore’s third-largest bank paid VND250 billion (US$15.6 million) for a 10-percent stake in VP Bank in April 2006, becoming the local bank’s sole strategic partner.
Aside from OCBC’s financial stake in VP Bank, the lender’s foreign experts have also helped the local bank develop strategies to become Vietnam’s leading retail lender.
The unlisted VP Bank, which has a chartered capital of VND2 trillion, focuses on consumer and medium-sized enterprises.
The lender reported pre-tax profits of VND105 billion in the first quarter of this year alongside total assets of VND22 trillion and non-performing loans accounting for 0.65 percent of its total outstanding debts.
OCBC has more than 300 branches in 15 countries and is the oldest bank in Singapore with nearly a century of experience.
In January, OCBC announced a plan to set up a fully-owned banking unit in Vietnam to take advantage of the country’s growing financial services industry.
“We see significant growth opportunities in Vietnam’s financial services sector, given the country’s large population of 83 million and high GDP growth,” said Linus Goh, the bank’s head of international operations, in a statement.
The Southeast Asian country’s credit growth was 54 percent last year, prompting the central bank to tighten money supply earlier this year.
In special cases, foreign investors may own up to 20 percent in local banks with direct approval from the government.
Thanhnien
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