Vietnam Prosperity Joint Stock Commercial Bank (VPBank) today announced that it has completed the private placement selling of 15% 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 value of the issuance totalled more than VND35.9 trillion (equivalent to nearly US$1.5 billion). All shares issued through the private placement are subject to a lock-up period of five years.
VPBank has so far received a 10% deposit from SMBC for the private placement prior to its annual general meeting held in April. The remaining 90% 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 (2022-2026). Thanks to the deal, VPBank’s owner equity will be boosted from VND103.5 trillion to approximately VND140 trillion. Its capital adequacy ratio (CAR), according to Moody’s Investors Service, will add up to almost 19% – the highest among the credit institutions rated by the credit rating agency in Vietnam.
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.
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 Vietnam, particularly those in the fields of infrastructure construction, green growth, climate-related, and sustainable business projects.
