Vietnamese bank attracts foreign investor
SYDNEY - Australia & New Zealand Banking Group said Thursday that it would buy 10 percent of Sacombank for $27 million, the first investment by a foreign lender in a privately owned Vietnamese bank. Sacombank, or Saigon Thuong Tin Commercial Joint Stock Bank, is one of about 30 private lenders in Vietnam that account for 12 percent of the nation's lending. With 92 outlets, it owns the nation's largest private network of branches, ANZ Bank said.
ANZ Bank, based in Melbourne, is focusing on consumers and small businesses in Asia, where it aims to raise investments to as much as 1 billion Australian dollars, or $772 million, equivalent to 10 percent of its capital base, as earnings growth slows at home.
"McFarlane's not going to bet the farm, but he recognizes that long-term growth will be more difficult to achieve if he just stays in Australia," said Andrew King, a fund manager at ABN AMRO Asset Management.
ANZ already owns 29 percent of Panin Bank in Indonesia and agreed in 2003 to buy 40 percent of a credit card venture with Metropolitan Bank & Trust, the Philippines' largest lender. Last year, it started a bank in Cambodia through a venture with Royal Group, and plans to buy 19.9 percent of Shanghai Rural Credit Cooperatives Union in China. Sacombank had $470 million of assets in 2003, according to an ANZ spokesman, Paul Edwards. In an interview in December, Tran Dac Sinh, director of the Ho Chi Minh City Securities Trading Center, said that Sacombank would probably become the first bank to list on the stock exchange in the second quarter of this year.
Vietnam's banking system is dominated by four state-owned commercial banks, which hold about 70 percent of the financial system's assets, Standard & Poor's said in February. Joint-stock banks like Sacombank account for 12 percent of total lending and foreign banks about 15 percent.
Financial liberalization in Vietnam in the early 1990s resulted in the establishment of private-sector banks known as joint-stock banks in which the government typically holds a minority stake.
Standard & Poor's has said joint-stock banks "tend to be more responsive to customer needs" because they are not burdened with administrative and branch networks like state-owned lenders. The banks play "an increasingly enlarged role in retail banking and lending to the private sector," S&P said.
ANZ, the biggest lender in New Zealand, also owns banks in Papua New Guinea, Fiji, Vanuatu, Kiribati, Cook Islands, East Timor, Solomon Islands, Samoa and Tonga. Elmer Funke Kupper, ANZ Bank's group managing director for Asia Pacific, said that the bank's stake in Sacombank might increase if limits on foreign ownership, currently at 30 percent, were lifted. International Finance Corp., the investment arm of the World Bank, and Dragon Capital Holdings each own 10 percent of Sacombank.
By Kevin Foley & Jason Folkmanis - Bloomberg News - March 25, 2005
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