When it comes to mergers and acquisitions in the banking sector, scoresof local banks have not only found it difficult to hold onto, but alsofind new foreign strategic partners as well, the Vietnam InvestmentReview reported on May 19. According to the newspaper, Sacombank, twoyears since bidding farewell to its international partners, has yet tofind a new replacement.
Similarly, Ho Chi Minh City-based HDBank, after failing to source partners last year, has pushed its plan tothis year. VPBank, after parting with OCBC, planned to find a newpartner, but has made little progress. Nguyen Manh Hung, an expert fromthe central bank’s Banking Strategy Institute, said there is a highdemand for foreign investors from Vietnamese banks.
The currentcap on foreign holdings in a Vietnamese bank is set at 30 percent, butthe average stake as of last year was lower than 10 percent. Explainingwhy local banks have found it so hard to find strategic partners, seniorfinancial expert Nguyen Chi Hieu said foreign banks were also hard hitby the global financial downturn and were also cautious about investingin Vietnamese banks during the sector’s previous boom phase and nowresultant restructuring period.
However many other experts areof the view that foreign investors were mulling other options such assetting up independent operations rather than teaming up with localinstitutions. After divesting from Sacombank, ANZ scaled up its presenceas a wholly foreign-owned bank in Vietnam by focusing on retail bankingand services for local businesses.
HSBC, though yet to revealwhether it will divest from Techcombank, has more than doubled itschartered capital, from 3 trillion VND (142 million USD) to more than7.5 trillion VND (357 million USD) to leverage its plan to expandthroughout the country. Foreign banks are being increasingly cautious intheir investment decisions.
Deputy director of the CentralInstitute for Economic Management Vo Tri Thanh said transparency was akey factor in attracting foreign investors. He said transparency mustexist at all levels and banks must commit to it both in their reportingand operations.-VNA
Similarly, Ho Chi Minh City-based HDBank, after failing to source partners last year, has pushed its plan tothis year. VPBank, after parting with OCBC, planned to find a newpartner, but has made little progress. Nguyen Manh Hung, an expert fromthe central bank’s Banking Strategy Institute, said there is a highdemand for foreign investors from Vietnamese banks.
The currentcap on foreign holdings in a Vietnamese bank is set at 30 percent, butthe average stake as of last year was lower than 10 percent. Explainingwhy local banks have found it so hard to find strategic partners, seniorfinancial expert Nguyen Chi Hieu said foreign banks were also hard hitby the global financial downturn and were also cautious about investingin Vietnamese banks during the sector’s previous boom phase and nowresultant restructuring period.
However many other experts areof the view that foreign investors were mulling other options such assetting up independent operations rather than teaming up with localinstitutions. After divesting from Sacombank, ANZ scaled up its presenceas a wholly foreign-owned bank in Vietnam by focusing on retail bankingand services for local businesses.
HSBC, though yet to revealwhether it will divest from Techcombank, has more than doubled itschartered capital, from 3 trillion VND (142 million USD) to more than7.5 trillion VND (357 million USD) to leverage its plan to expandthroughout the country. Foreign banks are being increasingly cautious intheir investment decisions.
Deputy director of the CentralInstitute for Economic Management Vo Tri Thanh said transparency was akey factor in attracting foreign investors. He said transparency mustexist at all levels and banks must commit to it both in their reportingand operations.-VNA
