Local banks hunting for dance partners

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Questions about foreign strategic partners were one of the core contents at DongA Bank’s recent annual general meeting of shareholders.

Responding to shareholders’ queries about when the bank leadership would reach a final decision on foreign strategic partners, its general director Tran Phuong Binh said the bank’s management had received proposals to cooperate with some foreign financial institutions.

“DongA Bank executives will roll out the red carpet to welcome foreign strategic partners. However, this does not mean the bank will find its strategic partner overnight,” Binh asserted.

Dong A Bank is set to hike its chartered capital from VND4.5 trillion ($217.3 million) to VND6 trillion ($289.8 million) in the last quarter of 2011. According to bank executives, it would be a good opportunity for foreign partners wanting to hold a big stake at Vietnamese banks.

About the stock price when selling to the strategic partner, Binh said the leadership was yet to reach a final decision but it would be ‘most favourable’ to existing shareholders.

In 2007 DongA Bank reportedly had a deal with US’ Citibank who wanted to become its strategic partner. The deal later failed to turn into a reality.

Setting stock prices in deals with strategic partners is always a headache to bank’s management. That is also the case with Trust Bank.

Its chairman Hoang Van Toan said some foreign financial groups had proposed to purchase the bank stocks but the executives were still be considered.

He revealed that the bank would hike its chartered capital and willingly buy in shares from capital-strapped existing shareholders upon their request.

Trust Bank will debut shares on Vietnam’s stock market at favourable market conditions, according to the bank executive.

Western Bank general director Dang Duc Toan said the present context was not a good time to find a foreign strategic partner and it would do so at ‘an appropriate time’.