KEB Hana Bank becomes BIDV’s strategic shareholder
South Korea’s KEB Hana Bank has officially become a foreign strategic shareholder in the Bank for Investment and Development of Vietnam (BIDV) following a cooperation agreement with the two sides inked on Monday.
BIDV andKEB Hana Bank signa strategic cooperation agreement on Monday. — Photo courtesy of BIDV
The agreement was signed under the witness of Vietnamese Deputy Prime Minister Vương Đình Huệ and South Korean Ambassador to Việt Nam.
KEB Hana Bank has completed the legal procedures regulated by laws of the two countries and owns 15 per cent of BIDV’s charter capital through acquiring 603.3 million shares worth VNĐ20.3 trillion (US$872 million).
After the share issue, BIDV’s charter capital increased from VNĐ34.2 trillion to VNĐ40.22 trillion ($1.73 billion) – the highest in the Vietnamese banking system.
This is the biggest merger and acquisition (M&A) deal in Việt Nam's banking industry.
KEB Hana Bank will hold shares for at least five years. At the same time, BIDV will receive long-term technical assistance from Hana Financial Group and KEB Hana Bank.
According to Ji Sung Kyu, KEB Hana Bank’s CEO, KEB Hana Bank's investment in BIDV is the first strategic investment project of a Korean bank in Việt Nam, which not only boosts banking efficiency but also synergises other areas such as card, securities, capital, insurance and fintech.
Kyu hopes that KEB Hana Bank becoming a strategic investor in BIDV will help diversify strategic investment projects and enhance cooperation between financial institutions of the two countries in the future.
At the event, the bank also announced "BIDV – KEB Hana Bank Education Development Programme" with a budget of $1 million per year, and contribution ratio of 50-50. The programme is focused on education, training cooperation, improving and exchanging knowledge and languages between Việt Nam and South Korea.— VNS
After the issuance, the bank's charter capital has increased by VND6 trillion from VNĐ34.2 trillion to more than VND40.2 trillion.
Growing bad debts reaching hundreds of millions of US dollars keep pressuring BIDV, Vietcombank, and VietinBank.