Vietnam Prosperity Joint Stock Commercial Bank (VPBank) announced on Friday that it has completed the private placement selling 15 percent of its equity stake to Sumitomo Mitsui Banking Corporation (SMBC), thereby admitting the second-largest bank in Japan as the strategic shareholder in its next development chapter.
VPBank initially reached a private placement agreement with strategic shareholder SMBC at the end of March, the Vietnamese bank said in a press release issued the same day.
Accordingly, the bank agreed to offload more than 1.19 billion shares to SMBC, the subsidiary of Japan-backed Sumitomo Mitsui Financial Group, Inc. (SMFG).
The total value of the issuance topped VND35.9 trillion (nearly US$1.5 billion).
All shares issued through the private placement are subject to a lock-up period of five years.
VPBank already received a 10-percent deposit from SMBC for the private placement prior to its annual general meeting held in April.
The remaining 90 percent of the transaction value will be settled by SMBC following the conclusion of the deal.
The private placement came as part of the capital expansion plan that VPBank has been implemented since 2022, in a concerted effort to bolster its long-term financial strength and to support itself in its quest to achieve ambitious growth targets in the third five-year development strategy (2022-2026).
|Leaders of the two banks exchanged documents for the completion of the private placement.|
Thanks to the deal, VPBank’s owner equity will be boosted from VND103.5 trillion ($4.2 billion) to approximately VND140 trillion ($5.7 billion).
Its capital adequacy ratio (CAR), according to Moody’s Investors Service, will add up to almost 19 percent – the highest among the credit institutions rated by the credit rating agency in Vietnam.
Given the strengthened capital base, VPBank will now be able to meet all customer needs in strategic segments including individual and small- and medium-sized enterprises (SMEs).
At the same time, VPBank will be geared up to serve large-scale corporate customers.
In addition, SMBC is expected to directly contribute to VPBank’s growth by sharing its knowledge and experience gained over the years in numerous Asian markets.
As for SMBC and SMFG as a whole, through local ties with VPBank, the group collectively can increase its presence and unlock opportunities to fund large investment projects in Vietnam, particularly those in the fields of infrastructure construction, green growth, climate-related, and sustainable business.
As one of the earliest-established joint-stock commercial banks in Vietnam, VPBank has achieved sustainable development throughout its 30-year history.
|Tetsuro Imaeda, deputy president and executive officer at SMFG and co-head of global banking at SMBC, noted that the event marks a new chapter of VPBank and SMBC as strategic partners on the journey of shared growth and prosperity.|
VPBank is now the leading commercial bank in Vietnam in terms of efficiency and profitability, with a strong presence in retail and SME segments.
It is also the digital pioneer implementing end-to-end digitization to deliver distinctive customer value propositions.
As at September 30, 2023, VPBank’s total assets amounted to approximately VND780.2 trillion ($32.5 billion), with a network of 264 branches nationwide.
VPBank is also among the best-capitalized banks with CAR of approximately 14 percent, way above the regulatory requirement, helping strengthen its balance sheet and provide space for future growth.
SMBC is one of the largest commercial banks in Japan.
With offices in 39 countries and regions including the Americas, Europe, Middle East, Africa, Asia, and Oceania, SMBC has an extensive global network and growing international presence.