Vietnamese banks selling stakes to foreign banks

Vietnamese banks need to sell their stakes to strategic partners to increase their capital as required by the central bank. It is expected that more banks will announce the plan to sell stakes to foreign partners by the end of this year or early next year.

Tran Thi Thanh Thanh, Chair of Mekong Bank, has revealed that the bank has found a strategic partner to sell 20-30 percent of its additional chartered capital. Selling stakes to foreign partners is a part of the bank’s plan to increase capital from US$51 million to US$1.538 billion in 2010. Thanh said Mekong Bank will officially provide more information about its foreign partner in the next month and will complete its capital increase plan in order to meet the requirements on charterd capital. Under the current regulations a bank must have a minimum chartered capital of three trillion dong by the end of 2010.

Hoang Van Toan, Chair of TrustBank, also said that his bank has found foreign partners. In their plan to sell 100 million shares with a face value of US$56.4 million to increase the chartered capital from two trillion dong to US$159 million. 

 Australian Commonwealth Bank has also purchased 15 percent of stakes of VIB Bank or 60 million shares to become the largest strategic shareholder of the Vietnamese bank. Under the agreement signed between the two sides, from October 2010, CBA and VIB will start a long term program on capability transfer, under which the foreign bank will help VIB increase its management and business capability, and upgrade risk management and competitiveness.

The  General Director of Standard Chartered Bank Vietnam Louis Taylor said the “playing field” for foreign banks in Vietnam has become flatter, while the implementation of Vietnam’s WTO commitments in the banking sector has brought satisfaction to foreign investors.

Under the commitments, from January 1, 2011, 100 percent foreign owned banks such as Standard Chartered Vietnam will be able to provide all the banking services like Vietnamese banks.