South Korea’s KEB Hana Bank has officially become the first foreign strategic shareholder of Commercial Bank for Investment and Development of Vietnam (BIDV) with a 15% stake, making this the biggest M&A deal in Vietnam's banking industry.
This is the first acquisition by a foreign financial institution of a considerable stake of a Vietnamese bank in many years.
BIDV issued over 603.3 million shares as a private placement to KEB Hana Bank with a total value of nearly VND20.3 trillion (US$875 million). After the share issuance, BIDV's charter capital increases from VND34,187 billion to VND40,220 billion - the highest in the Vietnamese banking system.
Upon the approval of the two governments and competent authorities of Vietnam and South Korea, BIDV and KEB Hana Bank have completed the deal procedures and legal documents regulated by the laws of the two countries.
| Representatives of KEB Hana Bank and BIDV sign the strategic investment agreement. Photo: BIDV|
This is a double transaction. KEB Hana Bank invests capital to own 15% stake in BIDV with the holding period of at least 5 years. At the same time, BIDV receives a long-term technical assistance from Hana Financial Group and KEB Hana Bank, including but not limited to 6 areas: strategic corporate governance; technology and digital banking; retail banking development; diversified asset portfolios; risk management; human resources training and development.
Addressing the ceremony, Nguyen Thi Hong, deputy governor of the State Bank of Vietnam, said the cooperation between the two leading financial institutions of the two countries not only brings benefits to the two banks but also the business community of Vietnam and South Korea.
KEB Hana Bank's large investment in Vietnam is a clear testament to the optimism and confidence in the stability and development potential of Vietnam's economy and the finance and banking industry in general and BIDV in particular, Hong added.
According to Mr. Ji Sung Kyu, Chief Executive Officer of KEB Hana Bank, KEB Hana Bank's investment in BIDV is the first strategic investment project of a Korean bank in Vietnam, which not only boosts the banking efficiency but also synergizes other areas such as card, securities, capital, insurance and fin-tech.
Established in 1957, BIDV is the largest lender in Vietnam by total assets, which hit VND1.43 quadrillion (US$61 billion) as of 30 September 2019.
KEB Hana Bank is a member of Hana Financial Group - one of the largest financial groups in Asia, providing comprehensive financial activities. As of 30 June 2019, the bank’s total assets stood at US$308.2 billion.