On the evening of November 11, the Bank for Investment and Development of Vietnam (BIDV - BID) officially held a ceremony to announce the strategic shareholder KEB Hana Bank.
According to information at the ceremony, the two sides met for the first time in Seoul Korea in 2017, then signed a cooperation agreement in April 2017 and August 2017 signed a non-binding agreement as to the basis for future negotiations.
On February 21, 2019, the SBV approved for BIDV to increase its charter capital through issuing shares to foreign partners.
On October 31, 2019, SBV approved KEB Hana Bank to buy 15% of BIDV shares.
On November 1, the State Securities Commission announced that KEB Hana invested 1,000 billion won to own 15% of BIDV's capital, this is the biggest deal in Vietnam's banking and finance industry ever.
From this cooperation, KEB Hana Bank will support BIDV in 6 areas of strategic management, improve risk management, diversify profitable assets, develop digital banks, retail banks, and improving human resource development ...
According to Phan Duc Tu, chairman of BIDV, this is a double benefit transaction: KEB owns 15% of the shares, the minimum ownership period is 5 years, while BIDV receives support from the leading Korean bank in 6 areas.
Strategic cooperation is even more important than helping to enhance trade relations between the two countries, in line with the guidelines of the Government of Vietnam and Korean policies.
He believes that the deal will help bilateral cooperation expand. With the available resources of the largest bank in Vietnam and a leading bank in Korea, the two sides can cooperate extensively in areas such as cards, securities, credit exchanges ... and especially Fintech.
"We have had concerns about 2 years ago about the figure of 1,000 billion won, we do not know if we can do it, but then gradually we can do it" - CEO of KEB Hana shared.
Also according to the representative of BIDV's strategic partner, KEB Hana said that the cooperation with BIDV is a once-in-a-lifetime opportunity that cannot be missed. In the coming time, the two sides will expand to other countries and regions, especially the Mekong River sub-region. KEB Hana also hopes to devote all its efforts to contribute to the development of Vietnam's banking and socio-economic sectors.
Speaking at the event, Ms. Nguyen Thi Hong, Deputy Governor of the State Bank, also said that this deal is the biggest in Vietnam's financial industry and also the biggest cooperation of a foreign financial institution in the domestic banking sector. "This investment shows that foreign partners highly appreciate the operating environment, policies of the State Bank and the Government of Vietnam as well as optimistic prospects in the banking and finance industry of Vietnam in the coming time" - Ms. Hong stated.
After more than 2 years of working between the two sides and with the State's approval, BIDV has completed the private placement of more than 603.3 million shares for KEB Hana Bank of Korea.
The total proceeds from the offering of shares were over VND 20,295 billion (with a selling price of VND 33,640 / share). After deducting issuance cost, the BIDV net collected over 20,208 billion dongs.
The issuance of the aforementioned shares has made KEB Hana a major shareholder with 15% of BIDV's capital, while helping the bank increase its chartered capital by VND 6,033 billion, from VND 34,187 billion to VND 40,220 billion, turning into the bank with the highest chartered capital in the current banking system.
After the issuance to KEB Hana, the state capital in BIDV is still very high compared to the State's regulations, so this bank can completely find one or more partners to become a strategic shareholder.
In a recent analysis, analysts of Rong Viet Securities Company also noted to investors that BIDV is still planning to continue issuing additional 10% to financial investors to reduce the government's ownership rate to 65% after 6 months from the time of issuance for KEB Hana and that, "with new money from KEB Hana, BIDV will have positive changes on the fundamentals as well as the growth prospects in the coming years".