(Updates with comments in third paragraph.)
Oct. 20 (Bloomberg) -- Commonwealth Bank of Australia, the nation’s biggest lender, will pay 1.15 trillion dong ($55 million) for an additional 5 percent stake in Vietnam International Commercial Joint-Stock Bank.
The purchase, approved by regulators in July, will increase Commonwealth’s stake to 20 percent, the maximum allowed for a foreign investor, from 15 percent, the Vietnamese lender known as VIB said in a statement published at a briefing in Hanoi today.
“Despite the short-term difficulties, Vietnam’s banking system is still very attractive to foreign investors from a strategic point of view, on the long-term horizon,” said Attila Vajda, Ho Chi Minh City-based head of institutional clients at ACB Securities Co.
VIB aims to use the investment to improve customer service and risk management, Chairman Han Ngoc Vu said at the press conference. In addition to Commonwealth, other lenders seeking to tap credit demand in Vietnam include Singapore’s United Overseas Bank Ltd., which last month increased its stake in Southern Commercial Joint-Stock Bank to 19.99 percent.
“It’s also good for the banking sector when such investment happens, as it adds very valuable know-how to the local banks, especially in areas such as risk management, product development, channel management and credit assessments,” Vajda said.
--Nguyen Kieu Giang. Editors: Nathaniel Espino, James Gunsalus
To contact Bloomberg News staff for this story: Nguyen Kieu Giang in Hanoi at firstname.lastname@example.org
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