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Banks source M&As to boost strength
Banks are mulling tie-outs with foreign strategic partners to foster financial wealth and sharpen competitiveness.
Ho Chi Minh City-based Sacombank- a leading joint stock commercial bank in the country- is scaling up efforts to source a suitable foreign partner to come up with its second phase capital hike plan, slated to finalise in 2013’s fourth quarter.
In the recent past, Sacombank was approved by the State Bank to hike its chartered capital in the first phase in 2013 from VND10.74 trillion ($511 million) to VND12.425 trillion ($591 million), up 17 per cent through issuing shares for paying dividend in 2011 and for distributing to top executives.
“The strategic foreign partner is a wealthy financial group,” said Sacombank chairman Pham Huu Phu.
Sacombank, however, still withheld information about this foreign partner.
Sacombank once had foreign strategic partners- ANZ Bank which retained around 10 per cent stake and DragonCapital over 7 per cent. However, ANZ had divested from Sacombank and sold its stake in the bank to another local bank-Eximbank.
Dragon Capital- a leading institutional investor in the Vietnamese stock market- also made exist from Sacombank several years ago.
This time, Sacombank envisaged selling 20 per cent stake to the foreign strategic partner.
The leader of a joint stock commercial bank, also based in Ho Chi Minh City, unveiled this bank would complete selling part of the chartered capital to a foreign strategic shareholder, possibly a financial group coming from Japan, right in this year.
“The two sides have completed negotiations and are setting remaining procedures for submission to competent government agencies. Besides, in the upcoming time our bank would also open a branch office or forming a banking joint venture in Myanmar,” said the leader.
Hanoi-based DongA Bank is also under negotiations to find foreign strategic partners, according to a bank executive.
The bank’s management, however, said selling stake to foreign partners would take place in a suitable time to ensure existing shareholders’ benefits since the market is still fraught with hardships with many bank shares falling below their par value.
Former State Bank Governor Cao Si Kiem said banks should consider teaming up with foreign partners only when analysis revealed the deals could be beneficial.
“Banks need to find suitable partners, but not in haste. Suitability in vision and strategic orientation etc. between cooperative parties is a prerequisite for effective operation. We source opportunities to leap faster but banks could still handle their growth plans effectively without support from the strategic partners,” Kiem said.
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