With the acquisition, KEB Hana Bank has become the second-largest shareholder and first foreign strategic shareholder in BIDV
Image: BIDV and KEB Hana Bank officials, along with Deputy Governor of the State Bank of Vietnam and South Korean Ambassador to Vietnam. Photo: Courtesy of Joint Stock Commercial Bank for Investment and Development of Vietnam.
South Korean bank KEB Hana Bank has completed the acquisition of a 15% stake in Bank for Investment and Development of Vietnam (BIDV) for nearly $875m.
By acquiring the stake, KEB Hana Bank has now become the second-largest shareholder in BIDV. The deal was closed after securing government and competent authorities’ approval in Vietnam and South Korea. KEB Hana Bank has also become the first foreign strategic shareholder in BIDV.
BIDV had issued more than 603.3 million shares as a private placement to KEB Hana Bank with a total value of nearly VND20,300bn ($875m).
After issuing the shares, BIDV’s capital increased from VND34,187bn ($1.47bn) to VND40,220bn ($1.73bn), the highest in the Vietnamese banking system, claimed BIDV.
KEB Hana Bank has agreed to provide long-term assistance to BIDV
While KEB Hana Bank has acquired a 15% stake in BIDV, the Vietnamese bank will receive long-term technical assistance from Hana Financial Group and KEB Hana Bank.
The assistance will include and will not be limited to six areas – strategic corporate governance, technology and digital banking, retail banking development, diversified asset portfolios, risk management, human resources training and development.
BIDV board of directors chairman Phan Duc Tu said: “The strategic partnership with Hana Financial Group is of great significance for BIDV, marking an important milestone in the bank’s development and international integration.
“With the long-term strategic support from KEB Hana Bank, Hana Financial Group – the financial institution with outstanding governance capacity and successful experience in South Korea and many countries around the globe, BIDV will have the opportunity to fundamentally change the governance model, improve management capacity; risk management; develop modern products and services of high technology content; enhance competitiveness, better meet the needs of customers for products and services, and contribute to national development.”
The partnership between the two banks not only marks a new turning point in the history of BIDV but also reaffirms the cooperation between Vietnam and South Korea to promote economic relations between the two countries.
This July, the two banks agreed on the deal under which BIDV decided to issue shares to the South Korean bank.