Dollar billionaires and hot competition in the banking sector in 2019
Two dollar billionaires in the banking sector emerged in 2019, which also witnessed competition that led to big changes in the economy.
The banking sector in 2019 saw a sprint to increase capital and attract foreign capital flow to meet international standards and upgrade banking technology.
After a gloomy decade, commercial banks reported explosive development with a strong inflow of foreign capital.
The selling of 603 million BIDV shares (BID) worth VND20.2 trillion ($870 billion) to KEB Hana Bank from South Korea was the most valuable deal in 2019. The share sale wrapped up in November 2019 after two years of negotiation.
|The selling of 603 million BIDV shares (BID) worth VND20.2 trillion ($870 billion) to KEB Hana Bank from South Korea was the most valuable deal in 2019. The share sale wrapped up in November 2019 after two years of negotiation.|
With the deal, BIDV became the biggest bank in the system with charter capital of VND40.22 trillion.
This is the biggest investment deal ever made by a South Korean bank and is part of foreign capital inflow which has been heading to Vietnam over the last two years after a decade of Vietnamese banks struggling with bad debt settlement.
Vietcombank and VietinBank also sold shares to foreign investors, while other banks are seeking foreign partners.
Banks from other countries are also racing to expand their presence in Vietnam after hearing that Vietnam intends to lift the foreign ownership limits.
Shinhan Bank has surpassed HSBC to become the No 1 foreign bank in Vietnam, with total assets worth $3.3 billion. Shinhan took over the retail banking division of ANZ Bank in 2017.
Banks have also been seeking capital from other sources to meet Basel II standards.
The Sai Gon – Hanoi Bank (SHB) owned by Do Quang Hien got approval from the State Bank of Vietnam (SBV) to raise its charter capital from VND12 trillion to VND15 trillion by issuing shares to existing shareholders.
With the rapid expansion, 18 banks have met Basel II standards, including 16 Vietnamese and two foreign banks.
Banks are applying high technologies, resulting in the launch of mobile apps, non-cash payment methods, cooperation with fintechs (MoMo, ZaloPay, Payoo and SenPay), P2P lending and conversion into chip cards.
The billionaires include Ho Hung Anh, president of Techcombank, and Nguyen Thi Phuong Thao, vice president of HD Bank.
By mid-December, Ho Hung Anh’s assets had risen from $1.3 billion to $1.4 billion. He ranks 1,749th among the richest billionaires.
Anh was officially added to the Forbes list of billionaires in March 2018.
Nguyen Thi Phuong Thao has U$2.7 billion, according to Forbes.
2019 has been a good year for the banking sector. Most commercial banks performed well with profit results exceeding the targets set earlier in the year.
Though the fiscal year 2019 is yet to end, early reports suggest major commercial banks in Vietnam will enjoy big fat earnings this year.