VPBank sells 15 per cent of its charter capital to Japan’s SMBC
VPBank on Monday announced that it has entered into an agreement with Japan’s Sumitomo Mitsui Banking Corporation (SMBC) - a subsidiary of Sumitomo Mitsui Financial Group, Inc (SMFG) to issue 15 per cent equity stake through a private placement, officially welcoming SMBC as a foreign strategic investor of the bank.
The investment from SMBC will help the bank raise VND35.9 trillion (approximately US$1.5 billion), of Tier 1 capital (equal to VND30,160 per share), increasing its owner equity to approximately VND140 trillion from VND103.5 trillion. This comes as part of the capital raising plan that VPBank has been implementing during 2022-23 in order to enhance its long-term financial strength and support the bank to reach an ambitious growth strategy over the next five years.
Following the latest SMBC strategic investment, VPBank will become Viet Nam’s second largest bank in terms of owner equity, which allows it to serve a wide range of customer needs in various segments, including retail banking, corporate banking and SMEs. The robust capital stance will also back VPBank in serving large-scale enterprises, particularly the FDI and multi-national companies that have been or will be investing in Viet Nam.
The new investment also proves a strong and trusted collaboration between SMBC and VPBank, since the two parties entered into a Business Partnership Agreement in May 2022. Previously, in 2021, SMBC Consumer Finance Co Ltd – a subsidiary of SMFG – also acquired 49 per cent equity stake in FE Credit, a wholly-owned subsidiary of VPBank.
SMBC, through this investment, will contribute towards VPBank’s growth by leveraging its know-how and business expertise accumulated in other Asian markets. SMBC is thus expected to help accelerate the digital transformation at VPBank, in order to deliver customer-centric banking products and services and superior customer experience.
Furthermore, thanks to the great reputation of a large financial institution like SMBC, the strategic deal is anticipated to attract and encourage potential FDI companies among the 200,000 corporate clients of SMBC to come and expand their investment in Viet Nam. These potential enterprises, once enter Viet Nam successfully, will also likely to become clients of VPBank.
For SMBC itself, through the rapport built with a local bank like VPBank, the group will be able to strengthen its foothold in the country and exploit opportunity to serve local investment projects, particularly those in the field of infrastructure construction and green and sustainable growth that the group has been paying attention to in recent years.
As one of the earliest-established joint-stock commercial banks in Viet Nam, VPBank has achieved sustainable development throughout its 30-year history. VPBank is now the leading commercial bank in Viet Nam in terms of efficiency and profitability, with strong presence in retail and SME segments. It is also the digital pioneer implementing end-to-end digitisation to deliver distinctive customer value propositions.
As at December 31, 2022, VPBank’s total assets amounted to approximately $27 billion, with a network of 251 branches national wide. VPBank is also among the best-capitalised banks with CAR at approximately 15 per cent well beyond the regulatory requirement, which has strengthened its balance sheet and provides headroom for future growth.
Sumitomo Mitsui Banking Corporation (SMBC) is one of the largest commercial banks in Japan. With offices in 39 countries and regions including the Americas, Europe, Middle East, Africa, Asia and Oceania, SMBC has an extensive global network and growing international presence.
SMBC and its group companies offer a broad range of financial services, including deposit taking, lending, securities brokering and trading, securities investment, money transfer, foreign currency exchange, corporate bond trustee services and custody services, financial futures underwriting, investment trust sales and other commercial banking activities.
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