Vietnam Opportunity Fund injects $11 million in Orient Commercial Bank
Vietnam Opportunity Fund injects $11 million in Orient Commercial Bank
Vietnam Opportunity Fund, the flagship fund of VinaCapital, has invested approximately $11 million in Ho Chi Minh City-based Orient Commercial Bank, for an interest of less than 5 per cent.
The investment in Orient Commercial Bank (OCB), a mid-tier retail bank in Vietnam established in 1996 and currently ranking 17th out of 34 banks in terms of total assets, was made via a privately negotiated deal, according to Vietnam Opportunity Fund (VOF), adding that it had recently received regulatory approval.
“This investment is a rare opportunity to own a stake in a bank that has high lending and earnings growth and a strong management team with a clear strategy for expansion,” said Andy Ho, managing director of VinaCapital Vietnam Opportunity Fund. “Over the past five years, OCB has been restructuring its business, and is now well-positioned to implement its growth strategy. In addition to negotiating an attractive price, we were able to obtain certain minority protections and performance commitments, which made this transaction all the more attractive.”
OCB has been rapidly expanding over the past four years, with a compound annual growth rate (CAGR) of 23 per cent, and expects earnings growth of approximately 100 and 30 per cent in 2017 and 2018, respectively. The bank expects 2017 after-tax profit to be $34.3 million.
The bank currently has 122 branches and offices nationwide and aspires to become a leading retail bank targeting affluent individual customers as well as small and medium-d enterprises. To help drive growth, OCB plans to diversify the range of its products offered to targeted customer segments.
BNP Paribas currently owns a 20 per cent stake in OCB. The bank expects to list on the Ho Chi Minh Stock Exchange before the end of 2019.
