Vietnamese banks expand in Indochina

Visual from VietinBank's homepage

Vietinbank has got nods from the State Bank of Vietnam to transform its branch in Laos into a bank, according to a document released by the central bank late on Tuesday.

The unit will be 100 per cent owned by Vietinbank and named as Vietinbank Lao Limited with a charter capital of $50 million, located in Chanthabouly District, Vientiane.

Vietinbank Lao’s duration of operation is defined as long as the mother bank is still operated. It is allowed to execute banking activities in Laos in accordance with Lao and Vietnamese laws.

Vietinbank will have to open this banking company within two years.

Also late on Tuesday, the bank announced it would list the remaining shares of the state holding on the HCM City Stock Exchange. This is just an initial approval from the central bank, and the specific timeline was not given, a source from Vietinbank told DEALSTREETASIA.

Vietinbank’s charter capital is over VND37.2 trillion ($1.7 million), equivalent to 3.72 billion outstanding shares. The central bank is holding 2.4 billion shares, or a 64.46 per cent stake.

Other large shareholders of the bank include the Bank of Tokyo Mitsubishi UFJ (19.7 per cent) and the International Finance Corporation (8 per cent).

After listing additional shares, Vietinbank will become the sixth most influential stock to the VN-Index, following PetroVietnam Gas, Vinamilk, Vietcombank, property developer Vingroup and consumer major Masan Group.

Vietinbank chose Laos as the second foreign market after Germany because of the favourable conditions of the Vietnam – Lao political relationship. “The objective of Vietinbank Lao Limited is to become a leading commercial bank in Laos,” the source said.

Apart from Vietinbank, last year, Saigon – Hanoi Bank (SHB) and Sacombank were also allowed to open banks in Laos through upgrading their branches.

The Bank for Investment and Development of Vietnam (BIDV) placed the first footprint in the Lao market in 1999. Its Lao – Viet Bank joint venture is Laos’ second largest bank in capital ($70 million). Last year, the bank’s profit hit $6.3 million.

Along with Laos, Cambodia is also a target market of Vietnamese banks with the presence of BIDV, Sacombank, Agribank, Military Bank and SHB. In November 2014, SHB inaugurated its third branch in Cambodia and is preparing a fourth one. Its first investment in the neighbouring country was worth over $37 million.

With potential for tourism, mining, hydropower, oil and gas and industrial plants, Cambodia is an attractive destination for international investors, said SHB chairman Do Quang Hien. “Investing in Cambodia is the first step in our global expansion strategy,” he added.

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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.