IFC seeks to invest $311 million in Vietinbank

The World Bank’s investment arm IFC has proposed an investment of up to $311 million in Vietinbank, Vietnam's second largest lender by assets.

The proposal, disclosed by IFC on Friday, consists of $186 million in equity and $125 million in debt.

The planned investment project is expected to help bring about the necessary institutional change to enable the bank to maintain its leading position and emerge as the country’s premier small and medium enterprise (SME) and retail bank, as well as support the Vietnamese government’s partial privatization plan for the lender, according to IFC.

Along with the proposed financing, the global finance giant plans to provide Vietinbank with advisory services in the areas of corporate governance, SME banking, risk management, energy efficiency financing, and information technology.

Established in 1988, Vietinbank is headquartered in Hanoi, and has four subsidiaries in leasing, securities, insurance and assets management. It provides a full range of banking services including corporate and SME banking, retail and consumer banking and international banking services. The lender completed its initial public offering (IPO) in December 2008 and has been listed on the Ho Chi Minh Stock Exchange since July 2009.

In March this year, IFC presented to Vietinbank two of its awards namely “Best Issuing Bank Partner in East Asia and the Pacific” and “Best Bank Partner for Climate Trade in East Asia and the Pacific”. It was the third consecutive time Vietinbank obtained these IFC awards, which are part of its Global Trade Finance Program (GTFP). IFC appraises the capacity of banks every two years for award purposes.

Vietinbank is Vietnam's second largest creditor by assets, after BIDV. Both have the state as the majority shareholder.