Vietnam lender SHB seeks strategic foreign investor

Saigon-Hanoi Bank (SHB) is seeking an optimal strategic partner towards delivering greater value to customers and shareholders, a source with knowledge of the matter told The Investor Friday.

The source, who wished to remain anonymous, shared the information in response to an inquiry following a Reuters report Thursday that the Hanoi-headquartered bank was in discussions to bring in a strategic partner that could own up to a 20% stake in the private lender.

The potential deal could value SHB at between $2 billion and $2.2 billion; and financial investors and companies from South Korea and Japan are among those that have expressed interest, the report said.

The news wire service also said that SHB was looking to tie up with a long-term foreign investor and also tap into the growing interest from South Korean and Japanese investors in Vietnam's banking sector.

The bank’s current market value is around $1.7 billion.

In April, International Finance Corporation (IFC), the World Bank’s investment arm, decided to invest $120 million in SHB to help it expand financial access for small and medium enterprises. SMEs that will benefit from this financing will include women-owned SMEs and those participating in the SHB supply chain finance program, the IFC said.

The IFC also proposed to establish a trade finance guarantee facility of $75 million under its Global Trade Finance Program (GTFP) with tenures of up to 12 months to support SHB’s trade finance business.

SHB is one of the top private commercial banks in Vietnam. The bank says it serves more than five million individual and corporate customers and connects with 500 correspondent banks across continents.

Other acquisitions

Hanoi-headquartered T&T Group, a Vietnamese conglomerate with interests in logistics, renewable energy, real estate and transportation, is SHB’s largest shareholder with a 10% stake, according to Refinitiv data.

In August 2021, SHB and Thailand's Krungsri Bank reached an agreement on the latter’s acquisition of a 50% stake in SHB subsidiary SHB Finance Co. Ltd. for VND3.59 trillion ($153.12 million). The acquisition, completed this May, marked Krungsri’s entrance into Vietnam as part of its ASEAN expansion.

Also in 2021, VPBank, another Hanoi-based Vietnamese lender, completed the sale of a 15% stake for around $1.5 billion to Japan’s Sumitomo Mitsui Financial Group. The deal made the Sumitomo Mitsui Banking Corp. (SMBC) a strategic investor in the Vietnamese lender.

In October 2021, SMBC renamed consumer credit firm FE Credit of VPBank as VPBank SMBC Finance Co. Ltd. It did so after spending about $1.37 billion acquiring a 49% stake in FE Credit. The major consumer credit firm said it was targeting unbanked and underbanked residents in Vietnam.