IFC okays new $100 mln funding for VIB’s housing portfolio

The World Bank’s investment arm IFC has approved a proposed investment of $100 million into VIB to further fuel the Vietnamese private bank’s housing portfolio, following a similar $150 million loan last year for the same purpose.

The latest will be a five-year USD-denominated loan, and the lending purpose also includes increasing VIB loans for affordable housing in the Vietnamese market, according to an IFC disclosure seen Friday.

If procedures go smoothly, the two sides are expected to publicize the new IFC investment this April.

VIB is a full-service commercial bank headquartered in Ho Chi Minh City. The lender will increase its charter capital by 20.4% to almost VND25.37 trillion (over $1.08 billion) under plans adopted at its annual general meeting on March 15. Consequently, VIB will issue shares to its existing shareholders and staff members.

The capital hike aims to serve the bank’s strong and sustainable growth and digitalization strategy as well as sharpen its competitive edge and maintain human resource development.

At present, the Commonwealth Bank of Australia (CBA) is the largest shareholder in VIB, holding around 20% of its charter capital since 2010.

IFC, the largest global development institution focused on the private sector in developing countries, has recently been ramping up its investment in Vietnam. The giant started to invest another $100 million in SeABank so that the Hanoi-based private lender can provide lower and middle-income families in the country with better access to housing loans.

That loan put IFC’s total investment in SeABank at nearly $400 million, according to the bank’s vice-chairwoman Le Thu Thuy.

According to IFC, half of Vietnam’s population, or about 50 million people, is expected to live in urban areas by 2040 in the wake of a rapid annual urbanization rate of 3%. This creates the need for an estimated 374,000 additional housing units every year.

IFC signed a $40 million loan for Saigon-Hanoi Bank (SHB) on March 21 to help the lender expand financial access for small and medium enterprises while seeking a $50 million financing package for the same purpose.