BIDV, Vietnam's second-largest partly private lender by assets, plans to sell a 15 percent stake to a strategic foreign partner and another 10 percent to an overseas financial investor, an executive said on Monday.
The Hanoi-based bank, known in full as the Bank for Investment and Development of Vietnam, would also raise its registered capital by 10 percent via a share issue to existing shareholders in the first half of 2015, senior executive vice-president Tran Phuong said.
BIDV's plans come as the country seeks to reform its fragmented banking sector, which is weighed down with bad loans after a decade of rapid expansion and is overcrowded with many small and under-capitalised operators.
"The foreign investors will provide technical assistance, help increase governance and risk management capacity, develop new products and enhance BIDV's competitiveness," Phuong told Reuters.
"It (the sale) will also help increase BIDV's financial capacity and provide grounds for the long-term development of the bank."
Phuong said further details of the planned stake offer would be provided by the third quarter of this year, clarifying an earlier comment that the sale would take place at that time. He gave no details about the would-be foreign investors.
The State Bank of Vietnam (SBV), the country's central bank, owns 95.76 percent of BIDV, according to Thomson Reuters data.
Vietnamese banks are permitted to have a foreign shareholding of up to 30 percent, with a single strategic partner allowed a maximum 20 percent stake. Special cases can be made, however, for larger foreign stakes in banks designated as "weak" by the SBV.
BIDV's net profit before tax last year jumped 20 percent from 2013 to 6.1 trillion dong ($286 million), while its assets rose 18 percent to 655 trillion dong, the bank said in a statement on its website last month. (bidv.com.vn)
Its bad debt ratio fell below 2 percent of total loans in 2014, from 2.9 percent in 2012, the statement said.
BIDV shares closed down 0.57 percent to 17,300 dong on Monday. They gained 35.7 percent last month in robust trade.