JavaScript is off. Please enable to view full site.

Singapore GIC in talks to own at least 7 pct of Vietnam's Vietcombank: sources

Friday, August 05, 2016, 17:01 GMT+7

Singapore's GIC Pte Ltd is in talks to own a stake of at least 7 percent in Vietcombank , sources with knowledge of the matter said, in what would be the sovereign wealth fund's second major investment in Vietnam this year.

Vietcombank will issue new shares to GIC should the deal go through, the sources said on Friday.

A successful stake sale in Vietnam's biggest lender by value would be a vote of confidence in the country's banking sector, once ridden with bad debts.

Vietcombank has been planning to issue new shares equivalent to 10 percent of existing stock to foreign investors. That would total more than $600 million based on current market value.

The stake is offered to GIC at a discount to market prices, the sources said, declining to be more specific.

The deal would need the approval of Vietnam's central bank, Vietcombank's biggest shareholder.

A GIC spokeswoman declined to comment, while Vietcombank did not reply to a request for comment.

With a 7 percent share, GIC would be the third-biggest investor after the State Bank of Vietnam, which owns a 77 percent stake, and Japan's Mizuho Bank, which holds a 15 percent share, said the sources, who declined to be identified because talks are still ongoing.

In March, GIC bought additional shares to own more than 5 percent in leading Vietnamese food producer Masan Group .

Vietcombank has said it expected a deal with a foreign investor this year.

Vietcombank's net profit in the first half of 2016 jumped an estimated 39 percent from a year earlier on strong credit growth and lower provisions for bad debts.

Moody's Investors Service said Vietcombank's retail business will grow due to a strong funding franchise and client base.

Vietnamese banks have enjoyed solid credit growth backed by a rebounding economy, while bad debts in the banking system have fallen from historic highs in 2012.

Bad debts rose to as much as 17.2 percent of total credit in 2012. The ratio has improved to 2.55 percent in 2015, central bank data shows.

But reforms in the sector have been hampered by complicated cross-holdings and a 30-percent foreign ownership cap. 



Read more




Vietnam’s Mekong Delta celebrates spring with ‘hat boi’ performances

The art form is so popular that it attracts people from all ages in the Mekong Delta

Vietnamese youngster travels back in time with clay miniatures

Each work is a scene caught by Dung and kept in his memories through his journeys across Vietnam

Experience summer sand-boarding in Mui Ne

Sand-boarding, a popular activity amongst local children in the coastal tourism town of Mui Ne in south-central Vietnam, is attracting hundreds of tourists to the Red Sand Dunes

Young maple trees given better protection as Hanoi enters rainy season

The trees are currently growing well, with green leaves and healthy branches.

Hunting skinks for food in southern Vietnam

Skink meat is known to be soft, tasty, and highly nutritious.

Latest news

France outlaws sex with children aged under 15

The French parliament on Thursday adopted legislation that characterises sex with a child under the age of 15 as rape and punishable by up to 20 years in jail, bringing its penal code closer in line with many other Western nations