Joint-Stock Commercial Bank for Foreign Trade of Vietnam, the state-owned lender known as Vietcombank, said it will sell a 15 percent stake to Mizuho Financial Group Inc. for about $570 million.
The central bank approved the sale, Chairman Nguyen Hoa Binh said by telephone Tuesday. Vietcombank will issue about 347 million new shares for the stake, said Chief Executive Officer Nguyen Phuoc Thanh, who gave the value for the deal. Masako Shiono, a spokeswoman for Mizuho in Tokyo, declined to comment.
Mizuho, Japan's third-biggest lender by market value, is expanding elsewhere in Asia as bank lending declines at home. Vietcombank, Vietnam's fourth-biggest bank by assets, first sold shares to outside investors in 2007, and said the same year that it sought a "foreign strategic investor" before the plans were derailed, in part by the global economic crisis.
HSBC Holdings Plc, Standard Chartered Plc and Australia & New Zealand Banking Group Ltd. are among foreign banks that have bought shares in Vietnamese banks and opened branches in the Southeast Asian country, bidding to tap into a consumer market that Credit Suisse Group AG describes as "under-banked."
Foreign investor interest in Vietnamese banks is positive for the country's financial industry, Moody's Investors Service said this month in a report that also warned about weakening earnings and deteriorating asset quality amid high inflation.
"Most banks will need fresh capital in the coming one to three years, and expect some capital support to be forthcoming from the foreign shareholders, if necessary," wrote Karolyn Seet, a Singapore-based assistant vice president at Moody's.
Shares of Vietcombank, which listed on the Ho Chi Minh City Stock Exchange in 2009, rose 0.8 percent today to close at 26,600 dong. Mizuho gained 1.8 percent in Tokyo to 113 yen.
Mizuho's investment will reduce the state's shareholding in Vietcombank, which is held through the central bank, to about 77 percent, according to CEO Thanh.