Vietnam: Korea’s KEB Hana Bank eyes BIDV’s stake

A BIDV bank card. Visual from the bank's website.

KEB Hana Bank, a subsidiary of Korea’s Hana Financial Group, plans to acquire a stake at Bank for Investment and Development of Vietnam (BIDV) as part of its business expansion, Business Korea reported.

A local financial official on March 8 told Business Korea that KEB Hana Bank was going forward with the acquisition of a stake in the BIDV, one of Vietnam’s four state-run commercial banks. The deal is nearly closed when the final step of the process was approved by Vietnam’s government, the report cited.

Under the plan, KEB Hana Bank will buy stake at BIDV when the bank raises new capital through capital increase to improve its financial structure.

BIDV earlier announced its plans to sell a 15 per cent stake to a strategic foreign partner and another 10 per cent to an overseas financial investor. In fact, the plan to sell stake to foreign investors was announced in 2015. At that time, BIDV was in talks with eight foreign investors for the overseas partnership, a similar move followed by other major banking players like Vietcombank and Vietinbank.

The Ho Chi Minh City Stock Exchange-listed bank in 2015 merged with the Mekong Housing Bank (MHB), with the entity to acquire the name and legal status of BIDV and be located at its headquarters. After the merger, BIDV reported 12 per cent rise in its registered capital from VND28.11 trillion (US$1.30 billion) to VND31.48 trillion ($1.44 billion).

The BIDV, which started as Vietnamese Construction Bank in Vietnam in 1957, is one of Vietnam’s four major government-run commercial banks. It made its initial public offering (IPO) in 2011 and listed in Ho Chi Minh City Stock Exchange in 2012. However, the IPO was hit by the economic crises with prices of BIDV shares failing to reach desired levels.

KEB Hana Bank, together with its subsidiaries, provides commercial banking, trust banking, foreign exchange, and merchant banking services to retail and corporate customers in South Korea and internationally.

Earlier this year, local media reported that Chairman of KEB Hana Bank met with Vietnamese Deputy Prime Minister Vuong Dinh Hue, emphasising the cooperation between Hana Bank and BIDV.

Vietcombank earlier also announced its plan to offload a 10 per cent stake to foreign investors in the first half of this year. Singaporean sovereign wealth fund GIC Private Limited and Japan’s Mizuho Bank are likely to become a significant shareholder in the bank.

Techcombank, meanwhile, also plans to list its shares on Ho Chi Minh City Stock Exchange (HoSE) this year and sell over 158 million treasury shares to foreign investors.

Orient Commercial Bank (OCB) signed a comprehensive cooperation agreement in 2017 with South Korea’s Daegu Bank, preparing for further cooperation in the future regarding international payments, services to small and medium-sized enterprises (SMEs) while LienVietPostBank is offering a stake of more than 10 per cent to overseas buyers.

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