Banks look to strengthen foreign ties to weather choppy economy

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In its upcoming general shareholder meeting slated on April 25, Sacombank executives will reaffirm its commitment to sell 15 per cent stake to foreign partners, according to a bank source.

In fact, the commitment was already approved at last year’s general shareholder meeting but the bank could not realise its commitment.   

Besides, partnering with a foreign player was not new to the bank as in the past Sacombank had sold 9.6 per cent of its chartered capital, tantamount to 103 million shares, to foreign strategic partner Australia and New Zealand Banking Group Limited (ANZ). However, in early 2012 ANZ had transferred its all stake in Sacombank to Vietnamese partner Eximbank.   

Besides ANZ, DragonCapital also took an exit from Sacombank through selling its entire stake (over 7 per cent of the bank’s chartered capital) in August 2011.   

According to Sacombank chairman Pham Huu Phu, the bank wants to sell 15 per cent stake to a suitable strategic partner.   Sacombank reportedly has on hands a list of seven potential ‘investors’ with one coming from Japan being viewed as the most weighty. However, who will become its strategic partner still remains unknown until present.   

Joint stock DongA Bank shared the same intention. However, according to the bank’s general director Tran Phuong Binh, selling stake to foreign partners in current context of market hardships would do harm to shareholder benefits, so the commitment will be temporarily halted waiting for a more appropriate time. Its plan to hike chartered capital to VND6 trillion ($286 million) from current VND5 trillion ($238 million) has faced a delay then.   

Saigon Commercial Joint Stock Bank (SCB) also envisaged hiking chartered capital from VND10.5 trillion ($504 million) to VND13.5 trillion ($647 million) through selling to foreign individual shareholders.   

Not only big banks, smaller banks also weighed over luring foreign partners to empower capital sources.  In its recent annual general shareholder meeting in late March 2013, one shareholder suggested the bank selling stake to foreign strategic partners to wrap up its capital hike plan from current VND3 trillion ($142 million) to VND3.7 trillion ($176 million) or VND4 trillion ($190 million).  The bank executives promised to carefully consider the proposal.   

Unlike those banks, Mekong Bank already found its foreign strategic partner –FFH, part of the Singapore-based Temaskek Holdings, which acquired its 20 per cent stake in Mekong and has considerable experience in banking management in diverse markets like Indonesia, India and China.   

At Mekong Bank, the foreign strategic partner not only acts as an advisor but also directly involves in training the bank staff with international standard professional and management skills.