KEB Hana acquires 15% of BIDVKEB Hana Bank purchased a stake in Vietnam’s largest bank by assets for about 1 trillion won ($848 million) as it seeks to bolster its presence in the Southeast Asian country.
Korea’s fourth largest bank said late Monday that it has agreed to acquire 15 percent of the Bank for Investment and Development of Vietnam (BIDV) for 1.03 trillion won.
After the stock purchase, the Korean bank will become the second-largest shareholder and BIDV’s only foreign strategic shareholder. The government owns 81 percent of the bank, and the remaining 4 percent will be owned by other non-state shareholders.
KEB Hana Bank explained that the move is in line with its business focus on the fast-developing region.
“It will provide a great opportunity to facilitate the expansion of financial services offered by Hana Financial Group’s affiliates in Vietnam,” a source at KEB Hana Bank said.
With the acquisition, KEB Hana plans to help BIDV improve risk management and profitability.
“We will seek to maximize returns by reorienting BIDV from corporate-oriented to retail focused, which might increase margins on fees and diversify revenue streams,” the source added.
BIDV, established in 1957, is a state-run lender controlled by the State Bank of Vietnam. The Vietnamese central bank holds a 95.3-percent stake in BIDV.
BIDV is Vietnam’s No. 1 lender by assets, with a slew of affiliates, such as an insurance company and an asset manager, under its wing. Its assets stood at 66.3 trillion won last year, and the lender logged net profits of 381 billion won.
Korean lenders have been racing to the Southeast Asian country, whose economic performance has been stellar for years, with many Korean companies venturing into the nation.
Earlier, the Vietnamese government announced that it would sell stakes in the BIDV and other state-controlled banks.
BY PARK EUN-JEE, YONHAP [firstname.lastname@example.org]