Japan's
Mizuho Corporate Bank on Friday said it would buy a 15 percent stake in
Vietnam's largest bank by market capitalisation to take advantage of economic
growth in the Southeast Asian nation.
Mizuho Corporate (MHCB) signed the deal, worth
about $567 million, with the Joint Stock Commercial Bank for Foreign Trade of
Vietnam (Vietcombank) in Hanoi.
"As a result, MHCB will be Vietcombank's
largest private shareholder and only next to the government of Vietnam,"
the Japanese institution said in a statement, adding that Vietcombank had total
assets of more than $16 billion as of June 30.
The Japanese bank said Vietnam and its
neighbours had high growth potential, giving "expectation of widening
business opportunities for Japanese corporations going forward in Vietnam, as
large-scale infrastructure projects progress and markets expand".
Several other overseas financial institutions
hold strategic stakes in Vietnamese banks.
"We think Vietnamese banks require more
capital than would be the case for those in most other Asian countries due to a
more volatile and challenging operating environment, high loan growth and
under-provisioning," Moody's Investors Service said in a report this
month.
Analysts have expressed concern that the
amount of bad loans held by Vietnamese banks is higher than officially
reported, and that the country's struggling smaller financial institutions
should be consolidated.
Reuters
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