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Banking & Finance

LienVietPostBank plans to sell 25% stake to foreign strategic investor

Released at: 10:50, 09/10/2017

LienVietPostBank plans to sell 25% stake to foreign strategic investor

Illustrative image (Source: cafef.vn)

Bank seeks expertise to expand it foothold.

by Quang Huy

LienVietPostBank is currently in talks to sell a 25 per cent stake to an overseas strategic investor as it seeks expertise to expand its foothold, CEO Mr. Pham Doan Son told an October 2 meeting with investors.

He did not, however, name the foreign partner or the price the shares may be sold for. His statement comes after the bank announced it has decided to on a foreign ownership limit of 5 per cent. As at July 17, the bank’s largest shareholder was the Vietnam Post Corporation, with 12.54 per cent.

Its co-founder, the Him Lam Corp., has not been a shareholder since June, shortly before Him Lam’s Chairman Mr. Duong Cong Minh stepped down as Chairman of the bank and was elected Chairman the Ho Chi Minh City-headquartered Sacombank.

LienVietPostBank expects its foreign partner to support it in building a governance and organizational strategy as well as provide financing, Mr. Son said.

Foreign ownership in Vietnamese banks is capped at 30 per cent, while a single foreign strategic investor can own a 20 per cent stake at most. The government has several times said it would loosen the cap to make investment in a local bank more attractive.

“A number of foreign investors have shown interest in acquiring shares and we are holding talks with several renowned institutions,” Mr. Son said. “We cannot reveal the price now and it will take years, not days, to complete the sale.”

The executive also denied rumors that LienVietPostBank would merge with Sacombank and noted that it would also not acquire a consumer finance company, as other banks have done, as it will make use of the 200 branches and transactions offices and the right to use 10,000 post offices of the Vietnam National Posts and Telecommunications Group (VNPT) nationwide.

On October 5, LienVietPostBank floated 646 million shares on the Unlisted Public Company Market (UPCoM) at VND14,800 ($0.65) a share. The bank had nearly VND150 trillion ($6.6 billion) worth of assets as at the end of August, and earned a pre-tax profit of VND1.29 trillion ($56.78 million) in the first eight months of the year.

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