Japanese lender spends $1.5B for stake in VPBank

The deal makes Sumitomo Mitsui Banking Corporation (SMBC) Japan’s second-largest banking group, a strategic partner of VPBank, the Vietnamese lender said Monday.

The $1.5 billion price tag is the biggest amount ever recorded to acquire a stake in a Vietnamese lender. Before VPBank, BIDV sold a 15% stake to KEB Hana Bank for over VND20 trillion ($850.6 million) in 2019.

Singapore-based Overseas Chinese Banking Corp. was earlier a strategic partner of VPBank but sold its 15% stake in 2013.

SMBC’s investment will increase VPBank’s capital by 35% to VND140 trillion, the second biggest in the industry behind Vietcombank.

Ngo Chi Dung (R), Chairman of the Board of Directors of VPBank, Mr Masahiro Yoshimura, CEO, Chief Investment Officer of SMBC Bank, sign the stake purchase agreement in Hanoi, March 27, 2023. Photo by VPBank

This deal is part of a capital increase plan that VPBank has been implementing since 2022 to increase its long-term financial capacity and achieve its growth target in the next five years, including in serving large-scale enterprises, particularly the FDI and multi-national companies in Vietnam.

SMBC expects the acquisition to attract more foreign direct investors to Vietnam. The SMBC Group has more than 200,000 customers who are multinational corporations and large enterprises around the world, and they can become potential customers of VPBank if they choose to invest in Vietnam.

A subsidiary of SMBC had earlier spent $1.37 billion to acquire a 49% stake in FE Credit, a unit of VPBank.

The Japanese lender also has a 4.27% stake in another Vietnamese lender, Eximbank.