Japanese eyeing Vietnamese finance institutions
Under the Vietnamese laws, one foreign investor must not hold more than 20 percent of stakes of a Vietnamese bank. This means that the 30 percent of HD stakes would be sold to at least two foreign institutions, possibly Japanese.
Pham Quang Thanh, Investment Director of Bao Viet Fund Management Company, has confirmed that a lot of Japanese have asked information about the fund certificates the company has put on sale, while suggesting the cooperation to seek the opportunities in the fields of retailing, healthcare and education as well.
According to Recof, a Japanese firm specializing in giving advices on merger and acquisition (M&A), the value of the M&A deals in the finance sector has been increasing steadily in 2009-2012. The figures in 2013 have not been updated, but it is obvious that Japanese are very interested in the Vietnamese finance & banking sector.
In the 2013 M&A report released in April 2013 by StoxPlus, a finance information service provider, the Tokyo Mitsubishi UFJ’s purchase of 20 percent of Vietinbank stakes in December 2012 was mentioned as the biggest M&A deals in 2012.
The fourth position in the list was the deal in which Sumitomo Life Insurance bought 18 percent of Bao Viet finance group’s shares from HSBC, worth $340 million.
Prior to that, Sumitomo Mitsui Financial bought 15 percent of Eximbank’s stakes worth $225 million in 2007, and Mizuho, also a Japanese group, bought 15 percent of Vietcombank’s stakes worth $560 million in 2011.
President of Sacombank Pham Huu Phu once revealed that seven institutions expressed their wish to buy Sacombank shares, while the bank was going to sell 15 percent of its shares to a Japanese one.
To date, Japanese have bought the shares of the three Vietnamese banks in terms of the total assets, namely Vietcombank, Vietinbank and Eximbank, while they are under the negotiations to buy the shares of two more banks.
Thanh from Bao Viet Fund Management Company noted that Japanese have been eyeing Vietnamese finance institutions for a long time, but they have become more dynamic recently.
Tran Hoai Vu, Vietnam Country Director of Recof Corp, noted that in the context of the global stiff competition, Japanese finance institutions all want to make their presence in their targeted markets sooner than their rivals.
Since there are no many more investment opportunities in their home market, Japanese tend to seek the opportunities in other markets, including Vietnam.
Thanh noted that Vietnam proves to be a more preferable investment destination for Japanese than Indonesia or Thailand, thanks to the good diplomatic relationships and cultural similarities.
StoxPlus has also noted that Japanese businesses cannot expect high business growth rates in Japan as the Japanese economic development has slowed down. Japan’s GDP growth rate was 1.2 percent only in 2012, while the figure is expected to stay at 1.4 percent in medium term.