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Banking & Finance

VPBank to conduct private placement this year

Released at: 17:31, 13/04/2017

VPBank to conduct private placement this year

Photo: VPBank

Bank plans to list on HoSE by Q3.

by Khanh Chi

The Vietnam Prosperity Joint Stock Commercial Bank (VPBank) is proceeding with a 15 per cent private placement to local and international investors in 2017 as part of its plans to increase its charter capital by around 40 per cent to over VND14 trillion ($620 million).

The price will be determined by mutual consent through negotiations between the bank and its investors, Mr. Nguyen Duc Vinh, CEO of VPBank, told shareholders at a meeting on April 10. Purchasers cannot re-sell their shares for at least one year.

The bank is also positive it will list its shares on the Ho Chi Minh Stock Exchange (HoSE) this fiscal year after a year-long delay.

It has told investors it expects the listing process to be completed in the third quarter at the earliest. The transaction is subject to regulatory approval, however. It has engaged an advisory company for the process.

Regarding capital supplements to the parent bank, VPBank said it was still in talks to sell 49 per cent of its consumer finance arm, FE Credit.

FE Credit is growing strongly, the bank said, and it needs to increase funding sources to assure the minimum capital adequacy ratio. The 49 per cent sale will also provide more capital to the parent bank.

The initial plan to partially exit the consumer credit unit was announced in 2015 but is yet to be finalized.

VPBank did not elaborate on the bidders or the price in the sale, but local media have reported it is in negotiations with a Japanese institution.

Vietnam’s ninth-largest lender in terms of total assets claims itself as one of the most active lenders in attracting financial facilities from major global institutions, including the International Finance Corporation (IFC) and Credit Suisse.

By the first quarter of 2017, IFC, the World Bank Group’s private lending arm, had completed a total of more than $200 million in financing packages for VPBank, including syndicated loans and quasi-equity investment.

Buoyed by such financial support, the Vietnamese lender is positioned to ramp up financial services for the country’s small businesses and private sector.

It is also targeting to become a leading player in retail banking and online banking, having empowered Vietnam’s first digital bank, Timo, which bagged a strategic investment from Canada’s Sun Life Financial.

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