Banks prepare for strategic partnerships

Some lenders have acknowledged the need for big strategic moves in the near future, photo Le Toan

Techcombank chairman Ho Hung Anh outlined the bank’s strategy for expansion over a week ago, maintaining a foreign ownership limit (FOL) cap at 22 per cent to accommodate additional share issuance to new strategic partners.

“We are actively searching for a strategic partner, and anticipate a premium share issuance price that would benefit all Techcombank shareholders, leveraging this as a strategic advantage,” Anh said.

He cited the precedent of VPBank’s successful capital boost with its strategic shareholder SMBC as a template for the approach of Techcombank.

Meanwhile, Tran Hung Huy, chairman of ACB, stressed a focus on internal growth over mergers and acquisitions (M&A) in line with shareholder interests, leading to the decision to forgo M&A activities this year.

“Despite potential partnership interests in its subsidiary ACB Securities, we are opting to internally raise capital for development first,” Huy said. “ACB will be open to capital raising opportunities if suitable cooperative prospects arise in the future.”

ABBank, at this year’s AGM, did not table any M&A propositions or private offerings to foreign investors. Yet, chairman Dao Manh Khang acknowledged the need for substantial strategic moves such as dealmaking or attracting new shareholders to achieve a future valuation of $3 billion.

Meanwhile, state-owned lender Vietcombank has progressed with its plan for a private issuance to foreign investors, a process initiated in 2019 yet still pending completion. This includes an intended sale of 307.6 million shares, of which 46.1 million are earmarked for Japan’s Mizuho Bank, with the remainder offered to other investors. Vietcombank is currently in the process of engaging advisory services to facilitate this issuance.

BIDV also adjusted its timeline, rescheduling its capital increase to 2024. The lender had previously planned to issue an additional 455 million shares either through a public offering or private placement. Although details of the offering remain undisclosed, the bank has long-standing intentions for a private issuance to foreign investors that have yet to come to fruition.

At HDBank, information sourced by Bloomberg indicated an exploration of a $500 million capital-raising initiative via a share sale.

Hoang Thanh Tung, director of HDBank’s Investor Relations, stated, “We are preparing for strategic partnerships, reserving around 10 per cent of the FOL for a potential capital increase. Our capital sale to strategic investors can proceed when market conditions and the right partner align.”

Nam A Bank’s CEO, Tran Ngoc Tam, noted discussions with foreign strategic partners to identify suitable investors, aiming to use the full 20 per cent FOL to draw additional international capital.

“Listing shares is a pivotal step in attracting global investors and consolidating Nam A Bank’s position as a premier retail joint-stock bank in Vietnam,” Tam noted.

Conversely, SHB chairman Do Quang Hien assured shareholders of plans to finalise foreign investor share sales in 2024, following through on the previous AGM’s approval for a capital increase through share issuance to foreign and strategic investors. He highlighted the importance of M&A deals in the banking sector, noting the bank’s pioneering role in aligning with government directives through its merger with Habubank, which suffered from longstanding troubles.

“The merger was a challenging process, particularly in terms of debt resolution, but SHB has now successfully completed the integration and transformation. SHB has contributed to major national projects and is now one of Vietnam’s largest banks in terms of scale,” Hien said at the bank’s AGM on April 25.

Discussing the plans for transferring stakes to foreign investors, Hien emphasised the delicate balance in negotiations, striving to meet the requirements of both parties while prioritising shareholder and bank interests.

“Quick stake transfers can be made at lower prices, but they can dilute shareholder value. Our strategy for transfers is focused on long-term sustainability, targeting at least the medium term,” he explained.

Banks raise charter capital for new growth stage A slew of local and foreign banks are increasing charter capital to prepare for the new growth phase of the banking industry and the economy.