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Vietinbank to sell 20% stake to Japan

Update: December, 28/2012 - 09:33

 

Customers make transactions at Vietinbank's Hung Yen branch. Vietinbank will sell a 20 per cent stake, worth $743 million, to Tokyo Mitsubishi UFJ, marking the biggest M&A deal in Viet Nam's banking industry. — VNA/VNS Photo Hong Ky
HA NOI (VNS) –
Vietinbank (listed as CTG on the HCM City Stock Exchange) will sell a 20 per cent stake to Japanese partner Tokyo Mitsubishi UFJ, following an agreement yesterday.

The VND15.465 trillion (US$743 million) purchase made it the largest acquisition in the banking sector, said Vietinbank's chairman Pham Huy Hung.

The Vietnamese lender said it had gained permission to issue new shares, to increase its charter capital to VND32.661 trillion ($1.55 billion) and equity to VND45 trillion ($2.1 billion).

The acquisition will make Vietinbank the largest Vietnamese commercial bank in terms of capital and shareholder structure.

Meanwhile, Tokyo Mitsubishi UFJ chairman Nobuyuki Hirano said the move would help his bank expand operations throughout Asia.

Prior to yesterday morning's agreement, Reuters and the Nikkei reported the Japanese investor would be represented on Vietinbank's board of directors.

It was estimated that Tokyo Mitsubishi UFJ would have to spend more than VND28,000 ($1.30) per CTG share, which finished up 2 per cent at VND20,700 ($0.98) yesterday morning.

Last year, Vietinbank sold 10 per cent to the International Finance Corporation for $182 million in cash and $125 million in loans over a 10-year period. In the current shareholder structure of the bank, the State holds 80.3 per cent.

Prior to the agreement with Tokyo Mitsubishi UFJ, Vietinbank had negotiated with the Bank of Nova Scotia as a potential strategic partner but had failed to settle on terms.

In addition to BTMU, other Japanese banks have also been investing in the Vietnamese financial market. Earlier this year, Vietcombank (VCB) sold 15 per cent to Mizuho Bank. In 2007, financial group Sumitomo Mitsui acquired a 15 per cent stake in Eximbank (EIB) for $225 million.

Vietinbank, Vietcombank and Eximbank are the three largest listed commercial banks, whose shares are tracked by the VN30 on the HCM City Stock Exchange. — VNS

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