Waiting for a blockbuster billion-dollar M&A deal during the shareholder meeting season

Foreign room at VIB is about 25% vacant. Photo: Le Toan

Foreign shareholders come and go

After the strategic shareholder Commonwealth Bank of Australia (CBA) withdrew its capital, VIB is looking for a new partner. Sharing at the 2025 Annual General Meeting of Shareholders, Mr. Dang Khac Vy, Chairman of the Board of Directors of the Bank, said that after CBA withdrew its capital, the foreign room at VIB is about 25% vacant. The Board of Directors of the Bank is discussing with banks, investment funds, and consulting units to find one or several suitable partners, ensuring the best price, and being able to provide additional support in capital mobilization, technology, etc.

The biggest deal that is expected is Vietcombank 's billion-dollar capital sale. The plan to privately sell 6.5% of its charter capital was proposed by the bank in 2019, but has been repeatedly delayed. At the extraordinary shareholders' meeting in August 2024, Vietcombank Chairman Nguyen Thanh Tung expected that the capital sale could be completed in the first half of 2025, if the market develops favorably. Specific information about the deal will be announced by the Bank at the annual shareholders' meeting held at the end of April.

Meanwhile, BIDV , after many delays, has successfully issued 123.8 million shares privately right before the 2025 General Meeting of Shareholders, raising VND4,752 billion. According to a recent announcement, the Bank has completed the offering of the above shares to 4 foreign investors and 1 domestic investor.

Of which, 4 foreign investors are Vietnam Enterprise Investments Limited (VEIL) buying the largest volume with nearly 59 million shares, accounting for 47.7% of the total offering; Hanoi Investments Holdings Limited buying 15.7 million shares; DC Developing Markets Strategies Public Limited Company buying 8.5 million shares; Samsung Vietnam Securities Master Investment Trust (SSMIT) buying more than 1.9 million shares.

In the group of private joint stock commercial banks, many banks also have plans to seek foreign strategic shareholders such as Techcombank, SHB...

Late last year, in response to foreign press, Techcombank’s General Director said that a shareholder owning 8-9% of the bank’s capital was planning to divest. If this shareholder withdrew, the bank would sell 15% of its shares to a long-term strategic investor, with priority given to partners with technological capabilities. However, to date, this divestment has not taken place.

Previously, Techcombank's leaders said that they were not too focused on finding foreign investors in the context that the Bank already had the ability to generate large profits and that raising new capital was not necessary at the moment. If there was a "matchmaking", Techcombank hoped to find a worthy partner, similar to the deal in which VPBank "married" with SMBC.

Meanwhile, SHB's plan to sell 20% of its capital to foreign investors has also been repeatedly delayed in 2023 and 2024. Shareholders expect that the bank's leaders will announce the capital sale progress at this year's General Meeting of Shareholders.

According to Mr. Ivan Tan, Director of Financial Institution Ratings, S&P Global Ratings, Vietnamese banks are under great pressure to increase capital and selling capital to foreign investors is one of the best solutions to increase capital. Currently, the Capital Adequacy Ratio (CAR) of Vietnamese banks is 12.4%, while in Cambodia it is 22.6%, in Thailand it is 20.5%, in China it is 15.6%...

Meanwhile, Mr. Nguyen Quoc Hung, General Secretary of the Vietnam Banking Association, said that Vietnamese banks attract foreign shareholders not only because of pressure to increase capital, but also because they want support in technology and management and operational capacity according to international practices and standards.

Expensive licenses

According to economic experts, the Vietnamese banking market is still attractive and has much room for development. However, for long-term strategic investors, the maximum foreign ownership limit of 30% is not attractive; and for short-term investors, the fact that Vietnamese banks pay dividends mainly in shares makes them dissatisfied.

We understand that the State Bank and the Government are concerned that foreign banks holding controlling stakes could affect economic sovereignty. However, this is less relevant when applied to financial investors such as investment funds or strategic investors.

- Mr. Do Minh, Country Director of Warburg Pincus Investment Fund

“One of the solutions for Vietnamese banks to increase capital is to sell shares to foreign investors. However, this solution is limited by the maximum ownership limit of 30%. Currently, good banks in Vietnam have no room for foreign capital, making it difficult to increase. In addition, many foreign shareholders are also dissatisfied because Vietnamese banks in recent years have paid few cash dividends, but mostly paid dividends in shares,” said Mr. Ivan Tan.

Sharing at the recent Conference on Investment Funds and Foreign Investment in Vietnam's New Development Era, Mr. Do Minh, Country Director of Warburg Pincus Investment Fund, said that foreign investors still expect Vietnam to further increase the foreign ownership ceiling in the banking sector. The foreign ownership ceiling of 30% in Vietnam is lower than many countries in the region such as India (74%), Indonesia (99%), Thailand and Singapore (unlimited). If this ratio is raised to 50%, the Vietnamese banking sector will have a major turning point in attracting foreign capital.

According to experts, if the ownership ratio is increased to 49-50%, the licenses of Vietnamese banks will be extremely valuable. However, it is likely that the Government will only loosen the room for certain banking groups.

In the immediate future, according to Decree 69/2025/ND-CP, from May 19, the banks receiving the transfer will have their foreign room increased to 49% (except for state-owned commercial banks). Thus, according to regulations, the foreign room of MB, HDBank, and VPBank will soon be increased to 49%.

In addition, with the banks that were forced to transfer (OceanBank, Dong A Bank, CB, GPBank) becoming subsidiaries of large banks, it is not excluded that in the future, they will be "transferred" by the parent bank to another partner. Currently, 3/4 of the banks that were forced to transfer have been renamed MBV, Vikki Digital Bank, VCBNeo and switched to operating under the digital banking model.

Source: https://baodautu.vn/cho-thuong-vu-ma-ty-usd-dinh-dam-trong-mua-dai-hoi-dong-co-dong-d261240.html