VPBank nears 15% stake sale to Sumitomo Mitsui

VPBank, Vietnam's largest private bank by chartered capital, is in the final stages of a deal to sell a 15% stake to Japan’s Sumitomo Mitsui Financial Group Inc. (SMFG) for about $1.4 billion, according to Bloomberg.

Under the deal, the lender will sell more than 1 billion shares to SMBC Consumer Finance Co., a unit of Sumitomo Mitsui, for VND32,000-33,000 ($1.35-1.4) each, the news service quoted people familiar to the transaction. The deal is expected to be signed later this month.

VPBank topped Vietnam's banking system in terms of charter capital after expanding it by 50% to VND67,434 billion ($2.83 billion) last December. This put it far ahead of state-owned banks who had hitherto held the top slots.

BIDV's chartered capital was then VND50,585 billion ($2.12 billion), while the figures for VietinBank, Vietcombank, and Agribank were VND48,058 billion, VND47,325 billion, and VND34,351 billion, respectively.

VPBank's pre-tax profit was VND21,220 billion ($904.93 million) in 2022, up 48% year-on-year, mainly thanks first-quarter profits.

The lender's total operating income reached VND57,797 billion ($2.46 billion), up 30%. While its net interest income was VND41,021 billion ($1.75 billion), up 19%.

As of December 31, 2022, VPBank's total assets hit VND631,073 billion ($26.91 billion), an increase of 15.3% compared to the beginning of the year.

The value of loans to customers was VND438,338 billion ($18.69 billion), up 23.4%, of which bad debts accounted for 5.73%. The figure recorded at the beginning of 2022 was 4.57%

VPBank's customer deposits at the end of the year were VND303,151 billion ($12.93 billion), up more than 25% compared to the beginning of the year.

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.

In mid-January, SMFG announced that it had sold a 10.8% stake in Eximbank to domestic investors, reducing its ownership rate to 4.27%. With this move, SMFG's transactions of EIB shares no longer needed to be registered in advance.