Leaders of the two banks exchanged documents for the completion of the private placement. — Photo courtesy of VPBank

Việt Nam Prosperity Joint Stock Commercial Bank (VPBank) on Friday announced that it has completed the private placement selling 15 per cent of its equity stake to Sumitomo Mitsui Banking Corporation (SMBC), thereby admitting the second largest bank in Japan as the strategic shareholder in its next development chapter.

VPBank initially reached a private placement agreement with strategic shareholder SMBC at the end of March. Accordingly, the bank agreed to offload more than 1.19 billion shares to SMBC, the subsidiary of Japan-backed Sumitomo Mitsui Financial Group Inc (SMFG). The total value of the issuance totalled more than VNĐ35.9 trillion (nearly US$1.5 billion). All shares issued through the private placement are subject to a lock-up period of five years.

Ngô Chí Dũng, VPBank Chairman, delivered the remark at the event. — Photo courtesy of VPBank

VPBank has so far received a 10 per cent deposit from SMBC for the private placement prior to its annual general meeting held in April. The remaining 90 per cent of the transaction value will be settled by SMBC following the conclusion of the deal.

The private placement came as part of the capital expansion plan that VPBank has been implemented since 2022, in a concerted effort to bolster its long-term financial strength and to support itself in its quest to achieve ambitious growth targets in the third five-year development strategy (2022-26). Thanks to the deal, VPBank’s owner equity will be boosted from VNĐ103.5 trillion to approximately VNĐ140 trillion. Its capital adequacy ratio (CAR), according to Moody’s Investors Service, will add up to almost 19 per cent - the highest among the credit institutions rated by the credit rating agency in Việt Nam.

Given the strengthened capital base, VPBank will now be able to meet all customer needs in strategic segments including individual and small- and medium-sized enterprises (SME). At the same time, VPBank will be geared up to serve large-scale corporate customers. In addition, SMBC is expected to directly contribute to VPBank’s growth by sharing its knowledge and experiences gained over the years in numerous Asian markets.

Tetsuro Imaeda, Deputy President and Executive Officer at SMFG and Co-Head of Global Banking Unit at SMBC noted that the event marks a new chapter of VPBank and SMBC as strategic partners in the journey of shared growth and prosperity. — Photo courtesy of VPBank

As for SMBC and SMFG as a whole, through a local tie with VPBank, the group collectively can increase its presence and unlock opportunities to fund large investment projects in Việt Nam, particularly those in the fields of infrastructure construction, green growth, climate-related, and sustainable business projects.

VPBank is among the leading commercial banks in Việt Nam in terms of efficiency and profitability, with strong presence in retail and SME segments. It is also the digital pioneer implementing end-to-end digitisation to deliver distinctive customer value propositions.

SMBC is one of the largest commercial banks in Japan. With offices in 39 countries and regions including the Americas, Europe, Middle East, Africa, Asia and Oceania, SMBC has an extensive global network and growing international presence. — VNS