The Vietnam Prosperity Joint Stock Commercial Bank (VPBank) has completed the private placement selling 15% of its equity stake to Sumitomo Mitsui Banking Corporation (SMBC), thereby admitting Japan’s second largest bank as its strategic shareholder in the next development chapter. 

VPBank initially reached a private placement agreement with strategic shareholder SMBC in late March 2023. Accordingly, the bank agreed to offload more than 1.19 billion shares to SMBC, the subsidiary of Japan-backed Sumitomo Mitsui Financial Group, Inc. (SMFG). 

The total value of the issuance totalled more than VND35.9 trillion (nearly US$1.5 billion). The shares issued through the private placement are subject to a lock-up period of five years. 

VPBank has so far received a 10% deposit from SMBC for the private placement prior to its annual general meeting held in April. The remaining 90% of the transaction value will be settled by SMBC following the conclusion of the deal.

The private placement came as part of the capital expansion plan that VPBank has been implemented since 2022, in an effort to bolster its long-term financial strength and to support itself in its quest to achieve ambitious growth targets in the third five-year development strategy (2022-2026). 

Thanks to the deal, VPBank’s owner equity will be boosted from VND103.5 trillion to approximately VND140 trillion. Its capital adequacy ratio (CAR), according to Moody’s Investors Service, will add up to almost 19% - the highest among the credit institutions rated by the credit rating agency in Vietnam.  

Given the strengthened capital base, VPBank will be able to meet all customer needs in strategic segments including individual and small- and medium-sized enterprises (SMEs). At the same time, VPBank will be geared up to serve large-scale corporate customers. 

In addition, SMBC is expected to directly contribute to VPBank’s growth by sharing its knowledge and experiences gained over the years in numerous Asian markets.

As for SMBC and SMFG as a whole, through a local tie with VPBank, the group collectively can increase its presence and unlock opportunities to fund large investment projects in Vietnam, particularly those in the fields of infrastructure construction, green growth, climate-related, and sustainable business projects.

As one of the earliest-established joint-stock commercial banks in Vietnam, VPBank has achieved sustainable development throughout its 30-year history. 

It is now the leading commercial bank in Vietnam in terms of efficiency and profitability, with strong presence in retail and SME segments. It is also the digital pioneer implementing end-to-end digitization to deliver distinctive customer value propositions. 

By September 30, 2023, VPBank’s total assets amounted to approximately VND780.2 trillion (US$32.5 billion), with a network of 264 branches nationwide. VPBank is also among the best-capitalized banks with CAR of approximately 14%, way above the regulatory requirement, helping strengthen its balance sheet and provide space for future growth.  

SMBC is one of the largest commercial banks in Japan. With offices in 39 countries and regions including the Americas, Europe, Middle East, Africa, Asia and Oceania, SMBC has an extensive global network and growing international presence. 

SMBC and its group companies offer a broad range of financial services, including deposit taking, lending, securities brokering and trading, securities investment, money transfer, foreign currency exchange, corporate bond trustee services and custody services, financial futures underwriting, investment trust sales and other commercial banking activities. SMBC is rated “A” by Fitch Ratings, “A” by Standard & Poor’s Global, and “A1” by Moody’s. 

PV