ANZ buys into Sacombank

Full house: Sacombank will reach its 30 per cent foreign ownership ceiling following ANZ’s stake purchase

Sacombank chairman Dang Van Thanh confirmed the State Bank had rubber-stamped the deal following months of consideration. He added that Sacombank would hold a function on August 8 to inform the public of the move.
In an agreement signed between Sacombank and ANZ in March this year, ANZ agreed to pay VND34,000 ($2.16) per share, much higher than the listed VND10,000, to win the $27 million deal.
With this investment, ANZ has become the third foreign financial institution eligible to sit on Sacombank’s management board, the first two being British fund management company Dragon Capital and the World Bank’s International Finance Corporation (IFC), each holding 10 per cent.
Foreign ownership at Sacombank has now reached its 30 per cent ceiling. Along with this investment, ANZ and Sacombank have formed a strategic alliance to use each other’s strengths and competitive edges.
Under the alliance, ANZ provides technical assistance in the areas of risk management, and retail and small business banking, while Sacombank works with ANZ to help its growing consumer and small-business franchise, which includes 100 branches and 18 ATMs, which is the largest network among Vietnam’s joint-stock banks.
ANZ executives viewed investing in Sacombank as a good platform to expand its presence in Vietnam’s rapidly growing banking sector. If the rules were changed, they said, and foreign investors could own more than 30 per cent of a Vietnamese joint stock institution, then ANZ’s investment could possibly increase over time.
ANZ was among the first foreign banks to establish itself in Vietnam and, with $20 million in registered capital, now has branches in Hanoi and Ho Chi Minh City and a representative office in the Mekong Delta capital Can Tho city.
Established in 1991, following the consolidation of four Ho Chi Minh City-based credit institutions, Sacombank is the largest joint stock commercial bank in Vietnam, considering capital and network size.
The bank recently increased its registered capital from VND740 billion ($46.9 million) to VND1.25 trillion ($79.2 million), and by 2010, this figure should reach VND3.2 trillion ($203 million).
Total assets of the bank jumped 42.4 per cent to VND10.4 trillion ($659 million) last year from 2003’s VND7.3 trillion ($465 million), and its overdue debts stood at 1.07 per cent of total outstanding loans.
This year, Sacombank plans to up its pre-tax profit by 40 per cent from 2004 figures to VND300 billion ($19.1 million).
In another development, the bank plans to launch its first Visa credit card in Vietnam by the end of this month, following years of accepting the card through cooperation with ANZ. A representative said Singapore’s Comex GeneSys provided Sacombank with complete credit card-processing solutions.
Sacombank is the fifth Vietnamese issuing agent for Visa after Vietcombank, ACB, Vietnam Eximbank and Incombank. In the remainder of the year, the bank will look at becoming an agent for MasterCard and JCB, and next year for American Express and Diners Club.
The bank has some 50 ATMs, 20 of which now accept five internationally recognised credit cards.
“Sacombank is planning many expansions. We expect to receive approval to open a remittance transfer company and a finance leasing firm very soon,” the representative said.