KEB Hana Bank has acquired a 15 percent stake in Vietnam's No. 1 bank for 1.02 trillion won (US$870.40 million). This is the biggest investment made by a South Korean bank in Vietnam.
KEB Hana Bank announced on July 22 that it has signed a deal with Bank for Investment and Development of Vietnam (BIDV), the largest bank in the country and one of the four state-run commercial banks, to buy 1.02 trillion won worth of stocks to be floated later by the Vietnamese lender.
Established in 1957, BIDV is a lender controlled by the State Bank of Vietnam (SBC). The Vietnamese central bank holds a 95.3 percent stake in BIDV. It is Vietnam's No. 1 lender by assets with a slew of affiliates, including a securities firm, a lease company, an insurance company and an asset manager, under its wing.
Its assets stood at 66.30 trillion won (US$56.31 billion) as of the end of 2018, and the lender logged net profits of 380.90 billion won (US$323.48 million). BIDV maintains strong growth momentum and has been receiving attention as a good investment target that offers investors not only stable dividends but also handsome capital gains.
More than 70 percent of BIDV’s loans are corporate loans and the lender is interested in expanding its retail banking business. It has chosen KEB Hana Bank as a strategic investor as the Korean lender focuses on retail finance and digital banking based on private banking. BIDV is also planning to forge partnerships with Hana Financial Group’s other affiliates in the future.
Previously, KEB Hana Bank has done business mostly with South Korean enterprises through its two branches in Vietnam – Hanoi and Ho Chi Minh. With the latest agreement, however, the bank will be able to make use of the business networks owned by BIDV in Vietnam, which include 1,000 branches and offices across the country and 58,000 ATMs.