Vietnam's bank seeks $700 mln via stake sale to foreign investor - report

Saigon Joint Stock Commercial Bank, Vietnam’s fifth largest by assets, is in talks to draw an investment of at least $700 million by selling a controlling stake to a foreign investor, Bloomberg reported.

As the first Vietnamese bank granted government approval to seek such foreign investment, the lender plans to sell more than half of the bank at par value through the issuance of new shares, Chief Executive Officer Vo Tan Hoang Van was quoted as saying.

“We’re really looking for a partner who would not only put money into the bank but also has the same vision about this market,” Van told Bloomberg. "More importantly, they need to help our clients to complete their real estate projects so that we can solve the bad debt issue in a shorter time."

Saigon Commercial Bank slashed its bad debt ratio to 0.68 percent by the end of last year from 7.25 percent in 2012, the lender said at its April 18 shareholders’ meeting.

Van said the bank has been in talks with banks, equity funds and insurance companies from China, Indonesia, Norway, and Taiwan over the stake sale. It expects intensifying negotiations with two potential investors from China and Indonesia.

The bank plans to submit its stake sale plan to the central bank for approval early next year and close the deal in mid-2018, he said.

The Vietnamese government currently sets a 30-percent cap on total foreign ownership in banks.

Prime Minister Nguyen Xuan Phuc told Bloomberg in January that he plans to raise the cap in banks to accelerate restructuring Vietnam’s banking system.

The government established the Vietnam Asset Management Company in 2013 to deal with bad bank loans, mostly incurred due to a slowdown in the country’s real estate market in the early 2010s.

State Bank of Vietnam's data showed the bad debt ratio was cut to 2.46 percent of total loans in November last year, from 17.2 percent in September 2012.