GIC, Mizuho invest $265m in Vietcombank

Vietcombank issued 111.1 million new shares, the bulk of which went to GIC, according to a statement. The Singaporean sovereign wealth fund now holds a 2.55% stake. Mizuho participated in the transaction so that its existing 15% holding would not be diluted. The Japanese bank initially invested $567.3 million in 2011, two years after Vietcombank listed on the Ho Chi Minh City exchange.

GIC agreed to pay about $400 million for a 7.7% stake in the bank in 2016, but the deal failed to get regulatory approval. There were reportedly concerns over the transaction being priced at a 25% discount to Vietcombank’s market value at the time.

The latest investment increases the bank’s charter capital to VND37.1 trillion. It is intended to help Vietcombank meet Basel II capital adequacy requirements and maintain its leading domestic market position.

Founded in 1963, Vietcombank was the first commercial lender chosen for a pilot privatization program in 2008 – an initiative that facilitated VinaCapital’s acquisition of a minority stake the same year. As of 2017, it had 101 branches and 397 transaction offices nationwide and total assets of VND1 quadrillion. Operating income for the year reached VND29.4 trillion, while net profit rose from VND6.8 billion to VND9.1 billion.

Last April, GIC was part of the cornerstone investor group that covered three-quarters of Vietnam Technological & Commercial Joint Stock Bank’s (Techcombank) VND21 trillion ($922 million) IPO, the country’s largest to date. A month earlier, Warburg Pincus committed $370 million to the lender, supporting plans to boost charter capital and pursue domestic expansion.

Also, last year, CVC Capital Partners acquired a 9.95% stake in Vietnam-based Asia Commercial Bank for around VND5 trillion, according to AVCJ Research.

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• Topics
• Southeast Asia
• Financials
• PIPEs
• Vietnam
• Financial Services
• GIC Private