Australia and New Zealand Banking Group Ltd. (ANZ) and London-based Hong Kong and Shanghai Banking Corporation (HSBC) are looking to boosting their stake ownership in Vietnamese partners in an attempt to expand their business in the developing market.
While the Vietnamese government is yet to permit a higher foreign ownership ratio, domestic partners have basically agreed to such a plan.
ANZ, the third-biggest Australian lender, and HSBC, Europe's largest bank by market value, are waiting for the State Bank of Vietnam (SBV) to allow any single foreign investor to double the foreign ownership stake limit in local banks to 20 per cent. The move is expected to follow the country’s entry into the World Trade Organization (WTO).
Reportedly, the central bank has also drafted a statute on foreign ownership in Vietnamese joint stock banks whereby a single foreign bank may be allowed to acquire a maximum 20 per cent stake of a local joint stock bank instead of the current level of 10 per cent.
However, total foreign ownership in any one bank will still be capped at 30 per cent, central bank governor Le Duc Thuy said while adding that overseas investors can own up to 49 per cent in listed companies in other sectors.
ANZ officially clinched a deal to contribute $27 million or 10 per cent stake in the Saigon Thuong Tin Commercial Bank (Sacombank) in August 2005, becoming the third foreign shareholder of Sacombank.
ANZ's stake has almost tripled in value after the Ho Chi Minh City-based lender became the first bank to list its shares on Vietnam's stock market on July 12.
ANZ now wants to raise its ownership in Sacombank “to a more meaningful level,'' revealed Owen Wilson, managing director of international partnerships at Melbourne-based ANZ.
Meanwhile, HSBC, which spent $17.3 million purchasing 10 per cent stake of the Vietnam Technological and Commercial Bank (Techcombank) in December 2005, will double its stake in Techcombank to 20 per cent as soon as the country’s central bank permits, said Alain Cany, chief executive officer in Vietnam for HSBC.
“We would prefer to be a more significant shareholder, to be more influential in the decisions of the company,'' Cany said.
Techcombank’s shareholders on August 19 already passed a resolution to allow HSBC to double its stake when the foreign ownership limit is raised.
Under the terms of Vietnam's accession to the World Trade Organization, as of next year, foreign banks will be able to establish wholly foreign owned subsidiaries which will be allowed to take unlimited local-currency deposits and issue credit cards, according to the Office of the US Trade Representative.
(Bloomberg, Vietnam Panorama)
Vietnamese
