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Banking & Finance

Warburg Pincus entities to invest over $370mn in Techcombank

Released at: 17:17, 14/03/2018

Warburg Pincus entities to invest over $370mn in Techcombank

Photo from techcombank.com.vn

Capital to fund expansion and solidify bank's leading position in Vietnam.

by Linh San

Two separate legal entities managed by Warburg Pincus, a leading global private equity firm focused on growth investing, will invest over $370 million in Techcombank, subject to appropriate regulatory approvals, according to a statement from Warburg Pincus.

The investment is part of Techcombank’s equity raising efforts to provide it with growth capital to fund expansions and enable it to further solidify its leading position in Vietnam.

“Vietnam’s economy and banking sector are experiencing tremendous growth right now,” said Techcombank Chairman Ho Hung Anh. “This year we celebrate our 25th anniversary, amid a market where the demand for banking services is sharply accelerating with increasing spending power among the population. Techcombank is in an excellent position to serve this demand and we look forward to working with Warburg Pincus to further consolidate and build upon our current financial strength.”

CEO Nguyen Le Quoc Anh added that the investment will help the bank pursue new high-growth opportunities and further its aim of being the leading bank in the region within the next decade.

The transaction represents the largest ever private equity investment in Vietnam and brings Warburg Pincus’s total commitment in the country to over $1 billion.

“The investment into Techcombank marks our continued commitment and strong belief in the long-term prospects for Vietnam,” said Mr. Jeffrey Perlman, Managing Director and Head of Southeast Asia at Warburg Pincus. “Vietnam is one of the fastest growing banking markets in Southeast Asia and Techcombank is well positioned with its leading retail franchise and best-in-class management team with strong local and international banking experience. We expect the bank to further consolidate its dominant position in Vietnam and become one of the leading banks in Southeast Asia.”

Techcombank was established in 1993 and was one of the largest private joint stock commercial banks (JSCBs) in Vietnam by total operating income and pre-tax profit as at 2017. Moody’s rated it among the highest among Vietnamese private JSCBs with a rating of B2/Positive, while S&P gives it a credit rating at the same level as the sovereign (according to ratings as at February). It recorded total operating income of $708 million last year and pre-tax profit of $373 million.

Warburg Pincus started investing in Southeast Asia in 2013 with Vietnam as its maiden market. Since then it has invested in seven companies in the region, including Vincom Retail, Lodgis Hospitality, the BW Industrial Development Joint Stock Company, ARA Asset Management, Go-Jek, NWP Retail, and Trax.

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