Japanese or South Korean Investors Likely to Buy Stake in MBBank

Diep Nguyen

15:15 16/07/2019

BizLIVE - So far, the size of the stake and the amount expected to be raised are not yet to be announced. FactSet data shows that Vietnamese’s government holds 44% of MBBank through some military-linked companies.

Japanese or South Korean Investors Likely to Buy Stake in MBBank
Part of Vietnam’s government’s stake in Military Commercial Joint Stock Bank, a Vietnamese lender, is going to be sold. MBBank’s market capitalization is estimated to be close to $2 billion. According to people close to the sale, the government is appointing banks to conduct the sale, may be for a single strategic partner, as reported by Wall Street Journal in a recent article.
This share sale is in the plan of Vietnamese government in paring ownership of hundreds of state enterprises to shift to more private-sector-led economy.
So far, the size of the stake and the amount expected to be raised are not yet to be announced. FactSet data shows that Vietnamese’s government holds 44% of MBBank through some military-linked companies. Domestic and foreign financial institutions now own 11% and the rest is held by individual investors and entities such as mutual funds.
In recent years, Vietnamese government is making efforts to open up the fragmented banking sector to welcome further competition, foreign technology and expertise. Foreign investors show interest in this sector, and this is good with regard to the strong economic growth of Vietnam 7.1% in 2018. 
In 2017, the government’s stake sale in Saigon Beer Alcohol Beverage Corp brings in $ 4.8 billion. Vietnam is expected by many economists to be among the biggest beneficiaries of redirected trade flows as multinational companies leave China for Vietnam and some other regional countries to avoid high tax applied by the US government with Chinese imported goods. 
From the MBBank public announcement, MBBank has the big network of more than 100 branches including two branches in Laos and Cambodia. MBBank also opened up representative office in Russia. In 2018 alone, MBBank recorded $267 million profit, nearly double from a year before. Total assets at the end of 2018 is calculated to be close to $16 billion.
From the article in Wall Street Journal, investors likely from Japan or South Korea may become the strategic investor in the MBBank share sale. This stake selling will help MBBank to meet new international capital requirements.

DIEP NGUYEN

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