News 12/28/2012 08:20

VietinBank sells 20% strategic stake to Bank of Tokyo-Mitsubishi UFJ

VietinBank raises US$743 million from 20% strategic stake sales to Bank of Tokyo-Mitsubishi UFJ

Signing Ceremony Strategic Investment Agreement and Comprehensive Cooperation Agreement between VietinBank and BTMU.

Hanoi, [27 December 2012] – Vietnam Joint Stock Commercial Bank for Industry and Trade (Hose: CTG, “VietinBank”, “The Bank”), one of the leading state-owned commercial banks in Vietnam, announced the signing of definitive agreements for the 20% strategic stake sale worth VND15.465 trillion, equivalent to US$743 million, with the price per share of VND24.000, to Bank of Tokyo-Mitsubishi UFJ (“BTMU”).

This transaction will be the largest ever M&A transaction in Vietnam’s banking industry to date and a milestone to VietinBank post its equitisation in 2008, enhance the bank’s financial capabilities and secure the stable long-term fundings for the bank’s development plan and raise VietinBank"s corporate profile with expected benefits from BTMU’s global expertise.

This landmark deal will involve a strategic stake sale of 20% in VietinBank for BTMU, the core retail and commercial bank arm of Mitsubishi UFJ Financial Group Inc (“MUFG”). The transaction was executed efficiently on a tight timetable and has shown the both parties’ willingness in forming a strategic alliance to capitalize the growth potentials of Vietnam market.

VietinBank has sought regulatory approvals to issue 20% stake to BTMU via new share issuance, raising its charter capital to VND32.661 trillion, raising its shareholder capital to about VND45.000 trillion. Post the transaction, VietinBank will become the commercial bank with the biggest charter capital and strongest shareholder base with State Bank of Vietnam remaining the biggest major shareholder, followed by two strong foreign financial institutional investors being BTMU and IFC and its related parties.

Mr Pham Huy Hung, Chairman of VietinBank said: “In 2012, VietinBank makes it a priority to expedite the equitisation process, finalizing and completing negotiations with a second strategic partner to increase shareholders’ equity and pave the way for more secure operations while focusing on restructuring the Bank to become more modern and competitive. We hope and believe that the strategic cooperation between VietinBank and BTMU shall manage to realize significant values via leveraging from BTMU’s strong support, expertise sharing and high commitment in the management, operational and risk management activities in the banking industry”.

Mr Nobuyuki Hirano, President of BTMU said: “As a part of a strategy aiming to further develop BTMU’s Asian business, the alliance aims, through collaboration between BTMU and VietinBank, to expand business through measures such as strengthening support for Japanese companies operating in Vietnam, where high growth is expected. Through this alliance with VietinBank, BTMU seeks to further strengthen its offering of comprehensive financial services in Vietnam and meet the diverse financial needs of its customers.”

The transaction is advised by JPM Securities Asia Pacific Limited. and expected to be completed during the Fiscal Year 2013, subject to regulatory approvals.

About Vietnam Joint Stock Commercial Bank for Industry and Trade (“VietinBank”)
Established in 1988 after being separated from the State Bank of Vietnam, VietinBank is a leading financial services group in Vietnam and the second largest bank in Vietnam in terms of total assets and branch network with a market share of 13.5% of lending activities, 14% of international payments and trade finance and 11% of fund mobilisation in Vietnam as of December 31, 2011.. The bank was equitised in 2008 and listed on the Ho Chi Minh Stock Exchange since July 2009. It is an established brand equity in credit, remittance and trade finance products, has the 2nd largest distribution network in Vietnam with more than 1,100 branches, transaction offices and savings counters nationwide, a leading card services platform and solid correspondent banking relationships with ~1000 banks worldwide. The bank has positioned as a leading universal bank with a diversified client base and proven to have the highest asset quality among state-owned commercial banks with strong shareholder supports.

About Bank of Tokyo-Mitsubishi UFJ (“BTMU”)
BTMU is the largest bank in Japan and key operating bank of MUFG, one of the world’s largest and most diversified financial groups with total assets of JPY218.9 trillion as of March 2012. As the largest bank, BTMU has strong relationships with Japanese corporations that are actively expanding businesses in Asia including Vietnam. The group comprises five primary operating companies, including The Bank of Tokyo-Mitsubishi UFJ, Ltd., Mitsubishi UFJ Trust and Banking Corporation, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Mitsubishi UFJ NICOS Co., Ltd. and Mitsubishi UFJ Lease & Finance Company Limited. MUFG’s services include commercial banking, trust banking, securities, credit cards, consumer finance, asset management, leasing and many more fields of financial services. The group has the largest overseas network of any Japanese bank, comprising offices and subsidiaries, including Union Bank, in more than 40 countries and 500 offices around the world. Within the Japanese retail banking market, which is the largest in Asia, BTMU is the clear market leader with over 40 million retail accounts.