TienPhong Bank (TPBank) announced on August 26 in Ha Noi that IFC was its new shareholder after making a quasi-equity investment of VND403.1 billion (US$18.35 million) in dividend preferred shares.

This will allow IFC, a member of the World Bank Group, to acquire nearly 5 per cent stake in the bank and make it the sixth largest shareholder in TPBank.

According to IFC, the investment in TPBank would help the institution expand loan services to better serve growing Vietnamese businesses, adding that the bank can have the ability to offer loans to more than 40,000 small and medium enterprises in Viet Nam representing a loan portfolio growth of more than $2 billion equivalent over the next five years.

TPBank joined IFC's Global Trade Finance Programme in December 2015 with an initial trade line of $10 million. IFC has recently increased its trade exposure to $30 million, based on active utilisation of the lender. To date, IFC has supported $40 million worth of trade transactions processed by TPBank for Vietnamese importers and exporters.

Bank Chairman Đỗ Minh Phú said, "IFC's abundant financing and extensive relationship network will enhance our capital resources and governance capacity as well as uncovering opportunities of co-operation with local and international financial institutions."

IFC's investment supports TPBank's long-range plan of becoming the country's leading digital bank, expanding its retail and SME reach, which comprise about 85 per cent of TPBank's portfolio.

Kyle Kelhofer, IFC country manager for Viet Nam, Cambodia and Lao PDR said, "The investment in TPBank demonstrates IFC's continued support to Viet Nam's banking sector and its development of diversified financial products and services to small and medium enterprises, which will in turn increase financial inclusion and employment and reduce poverty."

Founded in 2008, TPBank has grown into a medium-sized bank with total assets of $3.7 billion as of mid-2016. The other five largest shareholders of the bank included Doji Jewelry, FPT Group, MobiFone Corporations, Vietnam National Reinsurance Corporation and SBI Ven Financial Group Holding Singapore Pte.

Together with the investment in TPBank, IFC would support greater access to finance for the private sector by boosting lending capacity and strengthening operations of local banks in developing economies. IFC is also providing advisory services to further improve the lender's risk management, digital and Small and Medium Enterprises (SME) banking products, as well as corporate governance standards. 

VNS