Banking & Finance
VPBank sells 10% to Singaporean partner
http://www.vneconomy.com.vn/eng/index.php?param=article&catid=04&id=7c5076848f23e2
VNECONOMY updated: 24/03/2006
The Viet Nam Joint Stock Commercial Bank for Private Enterprises (VP Bank) signed a contract on Tuesday to sell 10 per cent of its shares to Singapore's Overseas Chinese Banking Corporation (OCBC), with share prices 4.5 times higher than their original value.
VPBank general director Le Dac Son said the deal also granted OCBC an option to obtain a stake of up to 20 per cent in VPBank, which would make the Singapore financial group its largest strategic partner.
The OCBC will hold a seat on VP Bank's management board with commitments to support the Vietnamese partner in banking technology, personnel training, risk management and information technology.
Under State Bank of Viet Nam regulations, domestic banks are permitted to sell shares to foreign credit institutions if they have at least VND500 billion (US$31.5 million) in registered capital. At present, VPBank's registered capital is VND310 billion ($19.5 million), but the bank would officially raise its registered capital on April 30 to VND500 billion ($31.5 million) by issuing more shares, Son said. VPBank planned to double its legal capital to VND1 trillion ($63 million) by the end of this year.
All bank shareholders would be entitled to buy additional shares equivalent to 60 per cent of the number of shares that they are currently holding, he explained, allowing current stakeholders to maintain the proportion of their interests in the bank.
The legal process for the sale of shares to OCBC was expected to be completed by the third quarter of this year, Son said.
The deal with OCBC has increased the price of VP Bank shares on the over-the-counter market by four times over the original value, to VND50,000 - 51,000 ($3.15-3.20), and is part of a trend of joint stock and even State-owned commercial banks selling shares to foreign partners.
The trend, considered indispensable to Viet Nam's integration in the world economy, would help improve local banks' risk management, financial capacity and management skills, said financial industry observers.
OCBC is the oldest bank in Singapore with 310 branches and representative offices in 15 countries and territories.
Source: Vietnam News
Copyright © News Online - Vietnam Economic Times
» ICP License: No 601/GP-INTER dated 09 April 1998 of the Ministry of Culture and Information - Socialist Republic of Vietnam
» News Online License: No 356/GP-BVHTT dated 27 June 2001 of the Ministry of Culture and Information - Socialist Republic of Vietnam
» Editor-in-chief: Prof. Dao Nguyen Cat
» Head office: + Address: 96 Hoang Quoc Viet road, Cau Giay district, Hanoi + Telephone: +84 (4) 755 2060 - Fax: +84 (4) 755 2046 + E-mail: vet at hn.vnn.vn