VPBank sells stake in Vietnam bank to Sumitomo Mitsui

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VPBank sells stake in Vietnam bank to Sumitomo Mitsui

On Monday, the HANOI: Vietnam Prosperity Joint Stock Commercial Bank sold a 15 per cent stake in the US $1.5 billion to Sumitomo Mitsui Financial Group, expanding the Japanese bank's presence in one of Asia's fastest-growing economies.

After the investment, VPBank, whose business ranges across retail, corporate, consumer finance and wealth management operations, will become Vietnam's second largest private lender by charter capital, with US $5.96 billion.

The investment is part of VPBank's plan to replenish capital since 2022 and helps the bank achieve its growth target, VPBank said in a statement released after the signing ceremony.

The deal comes as the central bank of Vietnam is trying to tighten limits on holding stakes in banks, making the banking sector less attractive to foreigners.

Japan's second-largest banking group, Sumitomo Mitsui, is seeking to capture growth in Asian emerging markets, due to limited business opportunities at home with ultra-low interest rates and an ageing population.

In late 2021, it acquired a 49 per cent stake in Vietnamese consumer lender FE Credit from VPBank.

The shares of Hanoi-based VPBank have risen 18.16 per cent this year, valuing the lender at around US $6.04 billion, while its net income rose 55.6 per cent to US $774.30 million in 2022.