OCBC to take VPBank slice

“The selection of OCBC will give VPBank a chance to facilitate its cooperation with foreign banks and to access modern technologies” - VPBank chief Le Dac Son

The acquisition, worth VND250 billion ($15.7 million), will occur after VPBank finishes raising its chartered capital to VND500bn ($31.4m) by the end of next month.
The acquired stake of the Singaporean bank will increase to 20 per cent once the government allows it to raise the ratio held by a strategic partner in a joint stock commercial bank with total asset value of VND6.5 trillion ($408.8m) and 31 branches.
The acquisition was announced in the strategic partner agreement signed by the two sides last week. Accordingly, the OCBC will initially support the local bank in terms of technology, training courses on consumption lending¸ cards, risk management and information technology.
“The selection of OCBC will give VPBank a chance to facilitate its cooperation with foreign banks and to access modern technologies, as well as improve governance work,” said Le Dac Son, VPBank general director.
David Conner, OCBC general director, said the bank had outlined its view for the next five years to further penetrate into the regional market including Vietnam, which posted the second highest rate of economic expansion in the world.
“We believe in financial service development potential in Vietnam and will turn our focus on small- and medium-sized enterprises as well as medium-income people,” said Conner.
Dragon Capital currently holds 10 per cent share in VPBank. With OCBC’s 20 per cent stake acquisition in the future, there is no room left for another institutional investor to join in if the cap on total foreign stake of 30 per cent is not removed.
In the State Bank of Vietnam’s latest draft on the stake allowed to be held by foreign credit institutions in joint stock banks, the rule has been maintained. However, a strategic foreign partner can hold up to 20 per cent.
The Ho Chi Minh City-based Export-Import joint stock commercial bank, Eximbank, is also considering to sell stake to a foreign bank, which will be named by the end of this quarter. That makes it the fifth Vietnamese commercial bank to sell its stake to foreign banks.
Earlier, UK-based rival Standard Chartered Plc. paid $22m for 8.56 per cent of Asia Commercial Bank (ACB), and ANZ Banking Group Ltd paid $27m for 10 per cent of Saigon Thuong Tin Commercial Bank (Sacombank), Vietnam’s largest semi-private bank by capital. Hong Kong and Shanghai Banking Corporation, Ltd also paid $17.3m for a 10 per cent stake in Vietnam Technological and Commercial Joint Stock Bank.



No. 754/March 27-April 2, 2006