When foreign banks want to leave Vietnamese partners

VietNamNet Bridge - The year 2017 saw a number of foreign investors leaving their Vietnamese partners and divesting from banks they once made every effort to develop.


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BNP Paribas has divested 74 million OCB shares



BNP Paribas divested all of its 74 million OCB shares of Phuong Dong Bank, which accounts for 18.68 percent of Phuong Dong’s charter capital. 

The transaction was carried out on December 26, 2017 and the buyer in the transaction has not been revealed.

BNP Paribas was a strategic investor of Phuong Dong Bank, which bought a 10 percent OCB stake in 2007 and then raised its ownership ratio to 20 percent in 2011. 

The capital withdrawal by BNP Paribas surprised many investors, especially when the domestic banking sector regained its strength and prospered.

In late December 2017, OCB announced it fixed the foreign ownership ratio cap at 23.66 percent. The bank’s latest statement showed that the foreign ownership ratio is 4.98 percent of charter capital.

Vietcombank recently sold 13.3 million OCB shares out of 19 million shares it offered to sell at the average price of VND13,005 per share. Vietcombank has to divest shares of some other banks so as to clear the cross-ownership status as per SBV’s request.

In late December 2017, OCB announced it fixed the foreign ownership ratio cap at 23.66 percent. The bank’s latest statement showed that the foreign ownership ratio is 4.98 percent of charter capital.

OCB has released information about the bank’s performance. It fulfilled the yearly business plan just after the first nine months. The bank made a profit of VND960 billion in the first 11 months of 2017 and the figure is expected to exceed VND1 trillion in a  year.

Other foreign banks also left in 2017. Vietnam VIB Bank has taken over the operation of Commonwealth Bank of Australia’s (CBA) HCMC branch.

CBA HCMC branch began operating in 2008. Two years later, CBA holding acquired a 15 percent VIB stake and then raised its ownership ratio to 20 percent. 

CBA is the strategic investor and biggest shareholder of VIB and holds two seats on VIB Bank’s board of directors and one seat on the supervision board.

After nearly 10 years of operation in Vietnam, CBA took the move to scale down its operation in Vietnam, analysts said.

HSBC has withdrawn capital from Techcombank, while ANZ Vietnam has sold its retail banking division.

Nguyen Tri Hieu, a banking expert, noted the trend of foreign banks leaving Vietnamese banks, selling a stake to domestic partners or investors from Asia (South Korea, Singapore and Japan). 

He said the decisions were made because the partnership didn’t bring the desired profits, while there are many other lucrative markets.

Other analysts believe that disagreements between Vietnamese and foreign managers are behind the departures.


US$1=VND22,000


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Kim Chi

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