VPBank completes sale of 15% equity to Sumitomo Mitsui Banking Corporation

Ngo Chi Dzung, VPBank chairman, speaking at an event to announce its stake sale to Sumitomo Mitsui Banking Corporation on Oct. 20, 2023. Photo courtesy of VPBank

VPBank reached an agreement with SMBC at the end of March tosellmore than 1.19 billion shares to SMBC, a subsidiary of Sumitomo Mitsui Financial Group, Inc.

The value of the deal is more than VND35.9 trillion (nearly US$1.5 billion). The shares issued through the private placement are subject to a lock-up period of five years.

VPBank received a 10% deposit from SMBC for the private placement prior to its annual general meeting held in April. The remaining 90% is to be paid at the conclusion of the deal.

The private placement comes as part of capital expansion plans VPBank has been implementing since 2022, in a concerted effort to bolster its long-term financial strength and support its quest to achieve ambitious growth targets in the third five-year development strategy (2022-2026).

The deal increases VPBank’s owner equity from VND103.5 trillion to approximately VND140 trillion.

Its capital adequacy ratio (CAR), according to Moody’s Investors Service, will rise to almost 19%, the highest of any credit institution in Vietnam rated by the credit rating agency.

Given the strengthened capital base, VPBank will now be able to meet all customer needs in strategic segments, including individual and SMEs.

At the same time VPBank will be geared up to serve large corporate customers.

SMBC is also expected to directly contribute to VPBank’s growth by sharing its knowledge and experience gained over the years in various Asian markets.

As for SMBC, and SMFG as a whole, through a local tie-up with VPBank, the group can collectively increase its presence and unlock opportunities to fund large investment projects in Vietnam, particularly in the fields of infrastructure, green growth, and climate-related and sustainable business projects.

Tetsuro Imaeda, deputy president and executive officer of SMFG and co-head of global banking of SMBC, said the event marks a new chapter for VPBank and SMBC as strategic partners in a journey of shared growth and prosperity. Photo courtesy of VPBank

As one of the early-established joint-stock commercial banks in Vietnam, VPBank has achieved sustainable development throughout its 30-year history. It is now the leading commercial bank in Vietnam in terms of efficiency and profitability, with a strong presence in the retail and SME segments.

It is also a digital pioneer that has implemented end-to-end digitization to deliver distinctive customer value propositions.

As of September30, VPBank’s total assets were worth approximately VND780.2 trillion (US$32.5 billion), and it had a network of 264 branches nationwide.

It was also among the best capitalized banks with a CAR of around 14%, far higher than the regulatory requirement, which helps strengthen its balance sheet and provide space for future growth.

Sumitomo Mitsui Banking Corporation is one of the largest commercial banks in Japan. With offices in 39 countries and regions, including the Americas, Europe, the Middle East, Africa, Asia, and Oceania, it has an extensive global network and growing international presence.

SMBC and its group companies offer a broad range of financial services, including deposits, lending, securities brokering and trading, securities investment, money transfer, foreign currency exchange, corporate bond trustee and custody services, financial futures underwriting, investment trust sales, and other commercial banking activities.

It is rated "A" by Fitch Ratings and Standard & Poor's Global, and "A1" by Moody's.