Singaporean sovereign fund eyes Vietcombank

Vietcombank has been planning to issue 360 million new shares worth $600 million at current market value, equalling 10 per cent of the bank’s existing stocks to foreign investors.

The stake volume, which is offered to GIC, will be discounted to the market price, however no specific price has been disclosed. The deal would have to receive approval from the State Bank of Vietnam (SBV), Vietcombank’s largest shareholder.

With at least seven per cent of the stakes, GIC would be the third-largest investor after the SBV, which owns 77 per cent, and Japanese Mizuho Bank with a 15 per cent stake.

Once successful, the deal will be GIC’s second large-scale investment in Vietnam this year. Earlier in March, GIC spent approximately $100 million on acquiring more than 27.6 million shares in Vietnamese consumer giant Masan Group Corporation to boost its stake from 1.38 to 5.08 per cent.

In the first half of 2016, Vietcombank recorded a pre-tax profit of VND4.27 trillion ($191.3 million), an increase of 35 per cent over the last year, and reduced its bad debts ratio to 1.74 per cent from 1.84 per cent.

Established in 1981, GIC, formerly known as Government of Singapore Investment Corporation Pte., Ltd., is a sovereign wealth fund of the Government of Singapore. The firm manages the foreign exchange reserves of the Singaporean government.

GIC invests in unlisted public and private companies with a strong equity focus on healthcare, financial and business services, as well as natural resources, real estate, fixed income, and alternative markets, including foreign exchange, commodity, and money markets across the globe. The firm invests through its subsidiaries GIC Asset Management Pte., Ltd., GIC Real Estate Pte., Ltd., and GIC Special Investments Pte., Ltd.