World Bank's private arm picks up a 4.999% stake in Vietnamese bank.
The International Finance Corporation (IFC) has become a strategic shareholder in TPBank, with almost 5 per cent of charter capital, according to an announcement made by the bank on August 28.
The World Bank’s private arm spent VND403.1 billion ($18.06 million) on acquiring 29.2 million additional shares to secure a 4.999 per cent holding.
The additional shares have a dividend of 8.5 per cent per annum and cost VND13,800 ($0.62). They are convertible to normal shares after five years and returnable in three years.
On August 5 TPBank received approval from the State Bank of Vietnam (SBV) to increase its charter capital to VND5.84 trillion ($261.86 million) from VND5.55 trillion ($248.86 million).
With the IFC investment the bank aims to increase its financial capacity to provide up to $2 billion in lending to small and medium-sized enterprises (SMEs) over the next five years.
As a strategic shareholder, IFC will consult TPBank on management activities and risk management and provide support on providing better banking services to SMEs. “Through this investment, IFC expresses its continuous support to Vietnam’s banking sector, improving and diversify banking services to support SMEs to expand their business and create jobs,” said Mr. Kyle Kelhofer, IFC Country Manager of Vietnam, Laos and Cambodia.
In mid-April the IFC increased its credit line to TPBank from $10 million to $30 million for providing financial support to SMEs.
It becomes TPBank’s sixth strategic shareholder, joining the DOJI Gold and Gems Group, FPT Corporation, MobiFone, the Vietnam National Reinsurance Corporation (Vinare), and Singapore’s SBI Ven Holding Pte. Ltd.
“We are happy with the arrival of IFC as a new shareholder, with which we have had a long-term strategic relationship,” said Mr. Do Minh Phu, Chairman of TPBank. “IFC has great financial capacity, an outstanding reputation and a large financial network, which will help TPBank increase its capital and management capacity and expand its opportunities to cooperate with other international financial institutions.”
TPBank targets total assets of VND91 trillion ($4.08 billion) this year, an increase of 20 per cent against 2015’s VND76.2 trillion ($3.41 billion). It also targets increasing its total mobilized capital by 23 per cent to VND84.5 trillion ($3.78 billion), against VND68.9 trillion ($3.08 billion) last year.
Total deposits are to rise by 62 per cent to VND63.8 trillion ($2.86 billion), from VND39.5 trillion ($1.77 billion) in 2015.
In the first quarter TPBank’s total assets were reported at VND73.59 trillion ($3.29 billion), down 3 per cent since December 31, 2015. Pre-tax profit was VND93.03 billion ($4.17 million), 30 per cent less year-on-year.