With this deal, SMBC, a subsidiary of Sumitomo Mitsui Financial Group, Inc (SMFG), has officially become a foreign strategic investor of the Vietnamese bank.
The investment from SMBC will help VPBank raise 35.9 trillion VND (approximately 1.5 billion USD) of Tier 1 capital (equal to 30,160 VND per share), increasing its equity to approximately 140 trillion VND from 103.5 trillion VND.
Following the investment, VPBank will become Vietnam’s second largest bank in terms of equity, which allows it to serve a wide range of customer needs in various segments, including retail banking, corporate banking and SMEs. The robust capital stance will also back VPBank in serving large-scale enterprises, particularly the FDI and multi-national companies that have been or will be investing in Vietnam.
The new investment also proves a strong and trusted collaboration between SMBC and VPBank, since the two parties entered into a Business Partnership Agreement in May 2022. Previously, in 2021, SMBC Consumer Finance Co Ltd – a subsidiary of SMFG – also acquired 49% equity stake in FE Credit, a wholly-owned subsidiary of VPBank.
SMBC, through this investment, will contribute towards VPBank’s growth by leveraging its know-how and business expertise accumulated in other Asian markets. SMBC is thus expected to help accelerate the digital transformation at VPBank, in order to deliver customer-centric banking products and services and superior customer experience.
Furthermore, thanks to the great reputation of a large financial institution like SMBC, the strategic deal is anticipated to attract and encourage potential FDI companies among the 200,000 corporate clients of SMBC to come and expand their investment in Vietnam. These potential enterprises, once entering Vietnam successfully, will also likely to become clients of VPBank.
For SMBC itself, through the rapport built with a local bank like VPBank, the group will be able to strengthen its foothold in the country and exploit opportunity to serve local investment projects, particularly those in the field of infrastructure construction and green and sustainable growth that the group has been paying attention to in recent years.
As one of the earliest-established joint-stock commercial banks in Vietnam, VPBank has achieved sustainable development throughout its 30-year history. VPBank 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 digitisation to deliver distinctive customer value propositions.
As at December 31, 2022, VPBank’s total assets amounted to approximately 27 billion USD, with a network of 251 branches national wide. VPBank is also among the best-capitalised banks with CAR at approximately 15% well beyond the regulatory requirement, which has strengthened its balance sheet and provides headroom 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.
