ASEAN KEY DESTINATIONS
HSBC to up stake in Vietnam bank to 20%
HSBC Holdings Plc was allowed by Vietnam’s government to increase its stake in partly private Techcombank to the ceiling of 20 percent for foreign ownership in a domestic bank, reported Reuters on Tuesday.
Vietnam’s government approval was made on July 30, under which Hanoi-based unlisted Techcombank would sell another 5 percent of stake to the London-based HSBC, bringing the foreign bank’s ownership to 20 percent, the State Bank of Vietnam was quoted by Reuters as saying in a statement.
The deal marks another step in Vietnam’s effort to liberalise its banking sector by allowing foreign banks deeper penetration into the local banking scene since the Southeast Asian country became a member of the World Trade Organisation in January 2007.
The government’s approval also made Europe’s biggest bank the first to own the maximum stake among 10 foreign banks which have bought shares in Vietnamese banks.
Vietnam caps foreign ownership in a domestic bank at 30 percent with a 15-percent limit for a strategic investor, who could own 20 percent subject to government approval.
It has been more than a year since July 2007, when HSBC secured permission from Vietnam to raise its stake in Techcombank, also known as Vietnam Technological and Commercial Bank, to 15 percent.
It was not clear how much HSBC would pay for the extra 5 percent but its deal in July 2007 was worth $33.7 million.
Techcombank is the country’s seventh-largest lender by assets, standing at 51.82 trillion dong ($3.14 billion) at the end of June, or 31 percent above the end of 2007.
Techcombank is the first bank in Vietnam, the world’s largest robusta coffee producer, to provide broking services for coffee exporters to trade directly on the London futures market.
In March, HSBC said it had obtained approval to set up a bank in Vietnam, making it one of the first overseas banks to incorporate there.