Foreign investors reap hefty returns from Vietnam’s 3 banks

Vietnamese banks have attracted foreign shareholders since 2005, with a number of deals worth hundreds of millions of U.S. dollars. The largest so far was Sumitomo Mitsui Banking Corporation’s (SMBC) US$1.37 billion investment in Vietnam Prosperity Joint Stock Commercial Bank (VPBank) in 2023.

Investments in 3 state-owned giants deliver strong returns

In September 2011, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) sold a 15-percent stake to Japan’s Mizuho Corporate Bank for VND11.8 trillion ($452.5 million).

In early 2019, the Japanese bank invested another VND930 billion ($35.7 million) in a private placement that involved Singapore’s sovereign wealth fund GIC, maintaining its 15-percent holding.

That stake is now worth VND75.3 trillion ($2.9 billion). Including VND5.6 trillion ($214.8 million) in cash dividends received, Mizuho’s investment is now worth VND80.9 trillion ($3.1 billion) in value, or 6.4 times the VND12.7 trillion ($487.1 million) it invested in the two transactions.

At Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), foreign investment began in early 2011, when the International Finance Corporation (IFC), a member of the World Bank Group, invested $182 million for a 10-percent stake.

Nearly two years later, in late 2012, the bank sold another 20-percent stake to Bank of Tokyo-Mitsubishi UFJ for VND15.465 trillion ($593.1 million).

Both foreign investors have made gains, although one has exited while the other remains a shareholder.

In November 2019 and January 2020, IFC sold its shares in two transactions, collecting VND2.376 trillion ($91.1 million) for shares that had cost VND1.44 trillion ($55.2 million).

Its stake subsequently fell to 4.99 percent, meaning it was no longer a major shareholder of VietinBank and was no longer required to disclose its share transactions.

Meanwhile, Bank of Tokyo-Mitsubishi UFJ has not sold any shares and still holds 19.73 percent of VietinBank. It has received more than VND4.9 trillion (187.8 million) in cash dividends.

Its remaining stake is worth about VND49 trillion ($1.87 billion), putting the total value of its investment at 3.5 times the initial amount.

The Bank for Investment and Development of Vietnam (BIDV) was the last of the three listed state-owned banks to open its capital to a major foreign strategic investor. In November 2019, the bank sold a 15-percent stake to South Korea’s KEB Hana Bank for about $778 million.

KEB Hana Bank now holds 14.21 percent of BIDV after declining to participate in the bank’s two recent private placements.

Its remaining stake is worth about VND40.8 trillion ($1.6 billion). Including more than VND1.5 trillion ($57.5 million) in dividends, the investment is now worth 2.1 times the amount invested nearly seven years ago.

SMBC roughly breaks even on Vietnam’s biggest banking deal

In October 2023, VPBank completed a private placement to Japan’s SMBC, raising more than VND35.9 trillion ($1.37 billion) for a 15-percent stake, the largest-ever deal in Vietnam’s banking sector.

However, the investment has yet to generate a gain based on the bank’s share price.

At the close of trading on August 27, VPBank shares were 9.1 percent below the price SMBC paid, putting the value of its stake at about VND32.62 trillion ($1.25 billion).

SMBC has received nearly VND3.6 trillion ($138 million) in cash dividends from four payouts since November 2023.

Including those dividends, the investment is worth nearly VND36.2 trillion ($1.38 billion), just over VND300 billion ($11.5 million) more than the original amount invested.

Foreign investors’ exits from other banks

Before investing in VPBank, SMBC had spent 15 years as a shareholder of another Vietnamese bank.

In November 2007, it paid $225 million for a 15-percent stake in Vietnam Export Import Commercial Joint Stock Bank (Eximbank). In early 2023, SMBC sold most of its shares for more than VND3.388 trillion ($130 million) and by mid-year had reduced its holding to 2.26 percent.

Several other foreign investors also entered the Vietnamese banking sector early and later exited.

In December 2005, HSBC paid $17.3 million for a 10-percent stake in Techcombank. It increased its holding to 15 percent in July 2007 and 20 percent in September 2008, becoming the first foreign institution to reach the 20-percent ownership ceiling at a Vietnamese bank.

HSBC sold its entire stake back to Vietnam Technological and Commercial Joint Stock Bank (Techcombank) in September 2017.

France’s BNP Paribas also exited Orient Commercial Joint Stock Bank (OCB) in December 2017 after a decade as a shareholder.

Also in 2005, Australia’s ANZ paid $27 million for a 10-percent stake in Sacombank. In early 2012, ANZ sold its entire holding to Eximbank in a deal estimated at about VND1.6 trillion ($61.4 million) based on the market price at the time.

Standard Chartered entered Asia Commercial Joint Stock Bank (ACB) in 2005, paying $22 million for an 8.56-percent stake. It later increased its holding to 15 percent and sold the entire stake to four foreign funds in January 2018.

The official transaction value was not disclosed, but the stake was estimated at more than VND6.2 trillion ($237.8 million) based on the market price.

More recently, Australia’s Commonwealth Bank of Australia sold three tranches of its stake in VIB in 2024 and 2025, reducing its holding by 5, 10 and 4.4 percentage points, respectively. The bank said it received A$650 million ($467.6 million) from the three sales.

$2 billion Techcombank deal reported, then denied

On August 26, Reuters, citing two sources, reported that BNP Paribas and South Korea’s KB Kookmin Bank were separately negotiating to become strategic investors in Techcombank in deals that could be worth $2 billion.

According to the sources, Techcombank was seeking a valuation equivalent to twice its book value, about 55 percent above its most recent closing share price before the report was published.

However, BNP Paribas said the following day that it had no plans to buy a stake in Techcombank. The South Korean bank also did not confirm the reported deal.

In comments to Seoul Economic Daily on August 26, KB Kookmin Bank said that when considering share purchases to expand its business, it typically reviews dozens of financial institutions, with Techcombank being just one of them. The two sides had not entered specific negotiations, the bank said.

Techcombank declined to comment.