IFC proposes $57m investment in Vietnam bank

The investment will support VPBank’s goals of increasing access to finance in Vietnam, particularly among small and medium-sized enterprises (SMEs). Capital for the project will come mainly from IFC, with potential commitments by IFC Financial Institutions Growth Fund and IFC Emerging Asia Fund, both of which are controlled by IFC Asset Management, which manages third-party capital on IFC’s behalf.

IFC’s investment follows an agreement last year to provide a financing package of up to $125 million to VPBank, beginning with a $50 million syndicated loan announced in August. The previous agreement is not mentioned in IFC’s disclosure and it is not clear if this investment is part of the financing package.

VPBank was founded in 1993 to provide financing for retail sector companies and SMEs in Vietnam. It was the country’s sixth-largest private bank in terms of total assets in 2015, and has 214 branches and transaction offices across Vietnam. In its most recent annual report the bank recorded income of VND12.1 trillion ($533 million), up from VND6.3 trillion the year before. Over the same period profit rose from VND1.6 trillion to VND3.1 trillion.

IFC is an active investor in Vietnam, both directly in Vietnamese companies and as an LP in funds that support its development goals. Its commitments in the last year include a $10 million investment in hydropower company Gia Lai Electricity and participation in the fourth fund of domestic GP Mekong Capital.

In addition, the development finance institution announced a partnership with the government-backed State Capital Investment Corporation to execute its divestment plan and explore co-financing opportunities.

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• Topics
• Southeast Asia
• Financials
• PIPEs
• Vietnam
• IFC
• Financial Services