Vietnamese lender VPBank signed a deal on Monday to sell a 15% stake to Japan’s Sumitomo Mitsui Banking Corp. (SMBC) for about $1.5 billion through a private placement.
The Hanoi-headquartered commercial bank said the deal is part of its capital raising plan to help it achieve its growth strategy over the next five years. The deal has also made SMBC a strategic investor in VPBank.
SMBC, part of the Sumitomo Mitsui Financial Group (SMFG), in October 2021 renamed consumer credit firm FE Credit of VPBank as VPBank SMBC Finance Co. Ltd. after spending about $1.37 billion acquiring a 49% stake in FE Credit. The major consumer credit firm targets unbanked and underbanked residents in Vietnam.
VPBank topped Vietnam's banking system in terms of charter capital after expanding it by 50% to VND67,434 billion ($2.83 billion) in December. This put it far ahead of state-owned banks that had hitherto held the top slots.
VPBank is one of the largest private banks in Vietnam, with assets of more than VND631 trillion ($26.91 billion) at the end of last year, up 15.3% compared to the beginning of 2022. Its business covers fields like retail, corporate, consumer finance and wealth management operations.
SMFG became a strategic shareholder in Vietnam’s Eximbank (EIB) in 2007, with 15% stake worth $225 million. However, disputes between Eximbank's shareholder groups for more than a decade derailed the Japanese investor's plans. After many petitions to purge members of the bank's board of directors and unsuccessfully organizing an extraordinary general meeting of shareholders, SMFG decided to withdraw capital from the bank. At the end of 2019, SMFG withdrew its representative from Eximbank's board.