Last Friday, HSBC informed the market that it has received approval from the State Bank of Vietnam to increase its stake in Vietnam Technological and Commercial Joint-Stock Bank (Techcombank) to 15% from 10% for a total consideration of VND539.4 billion ($33.7 million).
ANZ, meanwhile, says it has bought a 10% stake in a leading Vietnam stock broker, Saigon Securities Inc. The deal announced yesterday will cost ANZ $88 million and give it a stake in a business which has a 30% share of Vietnam's stock broking market.
HSBC is the first foreign bank to receive approval for a 15% strategic investment in a domestic Vietnamese bank.
In April, Vietnam's government passed a decree to allow foreign banks to own 15% of a Vietnamese commercial bank which may be increased to 20% subject to approval from the Vietnamese government. In accordance with these new regulations, HSBC officials say the bank intends to apply to the government for a second tranche of shares to take its stake to 20%.
"Raising our investment in Techcombank will allow us to expand our presence in one of AsiaÆs fastest growing economies, and reflects our focus on emerging markets," says Vincent Cheng, chairman of HSBC. "In addition to our increased shareholding, we plan to extend the technical service assistance we provide to Techcombank, and both parties intend to explore joint business opportunities. HSBC has committed $13.5 million to support the agreements on technical service assistance over a five-year period."
Founded in 1993, Techcombank is one of the countryÆs largest joint stock banks, with assets totalling VND25,000 billion at May 31, 2007. TechcombankÆs 2,000 staff serve almost 200,000 personal and over 13,000 commercial customers through a network of 100 branches and transaction offices in 20 provinces and cities across Vietnam.
Just as HSBC is a key long-standing foreign bank player in Vietnam, so too is ANZ, Australia's third-biggest lender. ANZ has operated branches in the country since 1993 and, in December 2005, it acquired a 10% interest in Sacombank for $27 million. It also has an agreement with Sacombank to form a credit card joint venture.
Saigon Securities (SSI), ANZ's latest investment, is a securities company that was established in 2000 and is listed on the Hanoi Stock Trading Centre. ANZ says the deal to buy a 10% stake in SSI for A$102 million will allow it to delve further into the institutional capital markets business.
"We have been cooperating with SSI for some time on corporate bond issues for large Vietnamese companies," says Bob Edgar, the man in charge of ANZ's expansion strategy in Asia. "The partnership combines the strong local market capabilities of SSI with ANZ's regional access."
Under the partnership, ANZ will nominate a representative to the SSI board and play a role in management.
ANZ has several strategic investments in Asia including: a highly successful stake in IndonesiaÆs PT Panin Bank; a credit card joint venture with Metrobank in the Philippines; a joint venture bank with Royal Group in Cambodia; a 20% investment in China's Tianjin City Commercial Bank; and a 19.1% stake in MalaysiaÆs AMMB Holdings Berhad which operates AmBank. The AmBank deal was completed in May this year.
ANZ's chief executive officer, John McFarlane, has stated that he wants 10% of the bank's shareholdersÆ funds invested in alliances with Asian banks and that, over time, ANZ will generate 20% of its earnings from the region. McFarlane is due to retire in September and his role is being filled by ex-HSBC Asia chief Michael Smith.
Smith will no doubt build on ANZ's Asian expansion strategy.
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