DEG extends $10m funding to Vietnamese commercial lender HDBank

Photo: Internet Archive

DEG, the investment arm of German state-owned development bank KFW, has extended a $10 million funding to Ho Chi Minh City Joint Stock Commercial Bank (HDBank), according to a disclosure.

The funds will be used as growth capital to grow the bank and expand financing to retail and SME customers.

In addition, the DEG investment will partially be used to invest in the bank’s IT infrastructure and develop digital banking features. This way, HD Bank will be better equipped to serve the growing need for credit of its retail and SME customers.

“DEG is assisting HD Bank to improve its corporate governance as well as improve in HR and environmental and social (E&S) management related topics, making HD Bank an employer of choice creating sustainable and decent jobs,” DEG said in the disclosure.

“The project contributes to our strategy of financial sector development and promoting SME financing,” it added.

Established in 1989 and privatised in 2008, HDBank is Vietnam’s eighth-largest private bank, with $15 billion in assets as of end-September 2021, and about 12 million customers.

Local conglomerate Sovico Group, which has operations spanning aviation, banking and finance, energy, hospitality and real estate, is HDBank’s largest shareholder with a 14.5% equity stake.

The Ho Chi Minh Stock Exchange-listed lender is particularly setting its growth focus in many of the underbanked rural areas in Vietnam.

In December 2021, The International Finance Corporation (IFC) and IFC Asset Management Company said they were planning to invest up to $95 million in HDBank’s US-dollar-denominated convertible tier-II bond.

The Vietnamese bank is targeting to raise up to $200 million through this privately placed bond issuance, with the balance expected to be raised from international investors.

In November, DEG and HD Bank signed an agreement in which DEG will arrange a syndicated loan of $200-300 million for HDBank to increase its working capital and tier 2 capital in 2021-22 and use for a number of strategic programmes, Vietnamnews reported.

In Vietnam, DEG most recently has extended a $17.5-million loan to Nova Consumer Group, a manufacturer of feed and medicine for farm animals.

DEG had earlier extended a $10-million senior long-term loan to Vietnam-based animal feed producer Anova Feed JSC.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.