20:53 (GMT +7) - Monday 25/09/2017

Banking & Finance

IFC to extend $200mn loans to VIB

Released at: 09:57, 13/09/2017

IFC to extend $200mn loans to VIB

Illustrative image (Source: thanhnien.vn)

Loans to consist of anchor-level A Loan and B Loan and/or Parallel Loan, foreign newswire DealstreetAsia reports.

by Quang Huy

The International Finance Corporation (IFC), the private lending arm of the World Bank Group, is likely to invest up to $200 million in the Vietnam International Commercial Joint Stock Bank (VIB) in the form of senior loans, foreign newswire DealstreetAsia has reported.

The loans will consist of an anchor-level A Loan and a B Loan and/or Parallel Loan to the Hanoi-headquartered bank, IFC said in an investment proposal. The financing was said to be long-term funding that will help VIB grow its small and medium-sized enterprise (SME), micro business, and affordable housing loan portfolio.

“The successful implementation of the project will promote lending in the economy and underpin overall growth in the economy, as higher loan volumes will benefit customers, suppliers, and new entrants,” IFC said.

In addition to the five-year funding, IFC commits to helping VIB access funding from other lenders, which is expected to facilitate further the cross-border commercial financing of private sector investment in Vietnam.

VIB was established in 1996 and has the Commonwealth Bank of Australia (CBA) as its strategic shareholder, with a 20 per cent stake. In July, it announced its acquisition of CBA’s Ho Chi Minh City branch, with the transaction being named as one of the most notable M&A deals of the year by the Vietnam M&A Forum.

The bank recorded total assets of VND115.4 trillion ($5.08 billion) as at the end of June, which increased around 10 per cent compared to the beginning of the year. From January to June, pre-tax profit topped VND380 billion ($16.7 million), rising 25 per cent year-on-year and equal to 51 per cent of its annual plan.

According to the latest data, VIB saw revenue growth in most key indicators in the period, with a 23 per cent increase in net interest income and 54 per cent growth in commission and fee income. “The well-controlled quality of its loan portfolio and rapidly-handled debts have helped slash provision costs by 29 per cent compared with the same period of 2016, contributing to improving the bank’s profitability,” the bank said.

Earlier, in May, Moody’s Investors Service upgraded its credit rating outlook for VIB’s local currency deposits and issuer ratings to positive from the previous stable.

VIB shares are traded on the Unlisted Public Company Market (UPCoM). The price reached VND21,500 ($0.95) at the close of trade on September 8, having gained 22 per cent since debuting in January.

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