IFC-backed SeABank seeks to sell shares to foreign investors

Vietnam’s SeABank, in which International Finance Corporation (IFC) has invested almost $400 million, will collect shareholders' opinions on approving its planned private placement of shares to foreign investors.

The Hanoi-based lender’s board of directors has just announced this March 14 is the deadline for its shareholders to register to vote in writing for the plan. The commercial joint stock bank did not reveal the number of shares to be offered.

SeABank, listed as SSB on the Ho Chi Minh Stock Exchange, said in late February that it had raised its charter capital from VND19.8 trillion ($837 million) to more than VND20.4 trillion ($862 million) after a share issue under its 2022 employee stock ownership plan (ESOP).

The VND594 billion worth of shares were issued to nearly 2,500 SeABank employees at VND15,000 ($0.63) per share. This is a staff caring program carried out periodically by SeABank for years.

IFC, the World Bank’s investment arm and the largest global development institution focused on the private sector in emerging markets, is investing another $100 million in SeABank to help lower and middle-income families in Vietnam get access to housing loans.

IFC announced the investment on February 7, saying the project is expected to create thousands of new jobs in construction and other related sectors.

Through the investment, announced on February 7, SeABank expects to at least double the number of lower and mid-end housing loans by 2026. In addition, the project is expected to create thousands of new jobs in construction and other related sectors.

The latest investment to promote Vietnamese housing loans brought IFC’s total investment in SeABank to nearly $400 million, said SeABank vice chairwoman Le Thu Thuy.

IFC has since 2021 advised the bank in the areas of climate finance, the Banking on Women program, and in environmental, social and corporate governance (ESG).

In October, SeABank received a $200 million loan from the U.S. International Development Finance Corporation (DFC) to support women-owned small- and medium-sized enterprises and for climate financing.

The lender achieved positive results last year with VND5.07 trillion (over $213.7 million) in pre-tax profit. Its total asset reached VND231.4 trillion (more than $9.75 billion), up 9.3% against 2021, while its bad debt ratio was reduced to 1.6%, according to a SeABank business report.

The bank’s return on asset (ROA) and return on equity (ROE) in 2022 were 1.83% and 18.1%, respectively.

In a related development, the State Bank of Vietnam is mulling over lifting the foreign ownership limit at HDBank, MBBank, and VPBank, brokerage house Yuanta Securities Vietnam said late this January.

The trio might receive such a preference from the central bank as they have participated in restructuring some “weak” banks, according to the firm. It is also part of the Vietnamese banking system’s plan to raise equity to counter heavy leverage risks.

The capital adequacy ratio (CAR) of this banking system reached 11.7% in October 2022, above the 8% requirement under the Basel II risk management standards.