SMBC finalizes $1.5-bln M&A deal with Vietnam's largest lender by charter capital VPBank

Japan’s Sumitomo Mitsui Banking Corporation (SMBC) has completed acquisition of a 15% stake worth $1.5 billion of Hanoi-based VPBank, making it the largest M&A deal in the Vietnamese banking system so far.

After the deal, SMBC, Japan’s second-largest bank becomes a strategic shareholder of the Vietnamese partner.

The deal is part of the capital expansion plan that VPBank initiated in 2022. After the share sale, VPBank’s owner equity will increase from VND103.5 trillion ($4.22 billion) to approximately VND140 trillion ($5.7 billion).

Its capital adequacy ratio (CAR) will rise to almost 19% - the highest among the credit institutions in Vietnam rated by Moody’s Investors Service.

Through VPBank, SMBC as well as its parent firm Sumitomo Mitsui Financial Group Inc (SMFG) can increase their presence and unlock opportunities to fund large investment projects in Vietnam, particularly those in the fields of infrastructure construction, green growth, climate-related, and sustainable business projects.

SMBC is one of the largest commercial banks in Japan. It has offices in 39 countries and regions including the Americas, Europe, Middle East, Africa, Asia and Oceania.

As of September 30, VPBank had total assets of VND780.2 trillion ($32 billion) and 264 branches nationwide. The bank became the largest taxpaying business in Vietnam in 2022.

The bank last month signed a deal for a $300 million loan from the U.S. International Development Finance Corporation (DFC) during President Biden's Hanoi visit.

VPBank shares closed Friday up 0.70% at VND21,600 ($0.88) each.