IFC and Vietinbank shake hands

On October 10, the signing ceremony was conducted with a Cooperation Agreement on Advisory Services covering Vietinbank’s SME banking, risk management, and energy efficiency financing.

A separate Memorandum of Understanding outlines IFC’s tentative plan to invest in Vietinbank. The investment is still subject to approval by both parties and IFC’s Board of Executive Directors.

“By helping Vietinbank build up its capacity and strengthen its products and services, IFC will assist the bank in reaching more small and medium enterprises through its nationwide network.  

The proposed engagement will help Vietinbank further develop as a leading SME and retail bank and underlines IFC’s support for the government’s equitization program in the financial and banking sector,” said Simon Andrews, IFC Regional Manager for Vietnam, Cambodia, the Lao People’s Democratic Republic, and Thailand.

Earlier this year, Le Duc Tho, deputy general director of Vietinbank, said the bank would the raise stakes of current existing shareholders in the second quarter and finish selling stake to two foreign partners in the third quarter.

"We are negotiating to sell a 15 per cent stake to an international bank and another 10 per cent to an international financial institution," said Tho.

The deals will supplement the bank's chartered capital with an additional VND4-5 trillion ($210.5 million-$263.1 million). The remaining around VND4 trillion ($210.5 million) will come from existing shareholders including a funds from the State Budget.

Vietinbank's chartered capital last year was VND11.2 trillion ($589 million) and will raise it to VND20 trillion ($1.05 billion) by the end of 2010.