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Vietnam’s banking sector eyed by foreign investors

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Analysts say the banking sector will attract huge foreign capital in 2019 as banks need to call for more capital.

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Vietcombank, for example, has increased its charter capital to VND37 trillion. The funds came from the sale of shares to Mizuho that allowed the Japanese strategic shareholder to maintain an ownership ratio of 15 percent. There was also a sale of 2.55 percent of shares to GIC, an investment fund from Singapore.

Under the central bank’s Decision 302, the capital from Standard Chartered has risen from VND3.080 trillion to VND4.215 trillion.

These were just two of the credit institutions which have completed or are implementing plans this year to increase charter capital with foreign money. Prior to that, foreign capital in 2018 flowed to Techcombank, HDBank and VP Bank.

The market is expecting other deals to wrap up in the future, including the sale of 17.65 percent of BIDV shares to South Korean KEB Hana Bank. The equitization of Agribank, one of the Vietnamese largest banks, has caught attention from South Korean Nong Huyp finance group. Meanwhile, Thai Srisawad Corporation has shown its willingness to buy ALC I finance company of Agribank.

Even weak banks and zero-dong banks, i.e, the banks transferred to the State Bank at the price of zero dong, have also received attention from foreign investors. 

An official of the State Bank said a foreign investor began eyeing Oceanbank in 2017.

Other banks are seeking foreign capital to improve financial capability. Nam A Bank reportedly has found a foreign investor and the two sides have reached basic agreements.

Vietnam is becoming increasingly attractive to foreign investors thanks to the FTAs it has or is going to sign, its upgraded position in the world and it image as an ideal ‘shelter’ in the US-China Trade war. Analysts say that in such conditions, banking will be one of the sectors to benefit.

A report from the Foreign Investment Agency showed that the total FDI capital registered in the first two months of the year increased by 75.7 percent, and the number of FDI projects increased by 25.1 percent compared with the same period last year. 

Vietnam recognized 1,039 deals of foreign investors buying into Vietnamese businesses with the total value of $5.17 billion, or 4.1 times higher than the same period last year.

Moody’s, in its latest report, predicted that capital from foreign investors will be the focus in 2019, since banks lack capital to satisfy the strict requirements of Basel II.



Source: VietNamNet

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