Details on landmark bank acquisition unveiled

In early 2012, Eximbank abruptly announced acquisition of a 9.73 per cent stake at Sacombank from ANZ. How was the takeover conceived?

Eximbank’s board of directors convened a meeting to review the bank’s business activities in 2011’s first half on July 15, 2011 in Da Lat city. At the meeting, the board discussed the possibility of putting claws into Sacombank through financial investment since one month earlier Sacombank strategic investor ANZ contacted us and offered to sell us their 9.73 per cent stake in Sacombank.  

Sacombank shares were offered at VND16,000 (77 US cents) per unit against the stock market price of VND12,000 (57 cents) per share at that time. The board came to an appraisal that Sacombank was a leading commercial joint stock bank in Vietnam. And that at that time the share price might be a bit higher than market price, but upon stock market rally several years later our investment venture would bring returns, even big returns, after trimming relevant expenses.

Besides, our bank status in Vietnam’s financial market would be significantly enhanced if we became Sacombank main shareholder.

Did the seller unveil why they wanted to leave?

We had asked ANZ representatives two questions. First, why they wanted to divest from Sacombank. Second, why they had chosen us for a stake hand-over but did not target Sacombank’s existing founding shareholders like Dragon Capital did.

For the first question, they refused to say. At the second question, they said they studied us carefully before voicing the proposal and they chose us because they wanted to find a potential and capable partner to take their seat in Sacombank.

All negotiations about stake transfer at Sacombank were handled by competent representatives of ANZ Bank in Australia. ANZ Vietnam personnel did not involve in the negotiation process and was only informed when everything was done.

Why did Eximbank decide to invest in another bank like Sacombank when it is already a big bank itself?

Eximbank has grown into one of biggest banks by scale among Vietnamese joint stock commercial banks. By the end of 2011, we reported VND12.355 trillion ($594 million) in chartered capital, VND16.300 trillion ($783.6 million) in equity capital and around VND183 trillion ($8.8 billion) in total asset value.

Eximbank restructured its investment portfolio several years ago and now possesses around VND2 trillion ($96.2 million) in cash for investment ventures. With our constantly ameliorated financial wealth in the past years the bank’s management recognised the growing importance to diversify and streamline capital sources, instead of just concentrating into credit activities.

In respect to investment orientations, we are particularly interested in banking since it is our field. Sacombank benefits from an extensive retail network, a diverse range of financial products, cutting-edge technology system and well-trained human resources. Hence, ANZ’s proposed divestiture would entail a good opportunity for Eximbank to step into a field that is our advantage, so we should not miss the chance, of course with approval from the State Bank.