HSBC has announced this week that it will become the first foreign bank in Vietnam to hold a 20% interest in a domestic bank as it increases its stake in Vietnam Technological and Commercial Joint Stock Bank (Techcombank) from 14.4% to 20%.
The transaction follows the granting of special approval from the State Bank of Vietnam and Vietnamese Prime Minister Nguyen Tan Dung in July to increase HSBC's investment in Techcombank beyond the foreign ownership cap of 15%.
Vincent Cheng, Chairman of HSBC Asia Pacific, commented on Friday:
"Techcombank is a key component of our dual strategy for growth in Vietnam, comprising investment in our own operations to drive organic growth as well as investment in strategic partnerships. We value the trust placed in HSBC by the Vietnamese Government in allowing us to become the first foreign bank to hold a 20% stake in a domestic bank.
"As many of our partners know, the Group has always taken an active, rather than a passive, role in working with its strategic partners. While our increased investment will cement our growing relationship with Techcombank, we are also committing additional resources to help Techcombank in its growth and also contribute to the development of Vietnam's financial markets," he added.
In accordance with the agreement between the two parties, Techcombank will issue new shares, priced at VND60,891.52 per share, to raise HSBC's strategic investment to 20%. The transaction is expected to be completed by September 5, 2008.
In addition to seconding specialist staff to Techcombank and sharing expertise and market knowledge, the two partners have also embarked on business co-operations such as a shared ATM network for both banks' customers.
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