Foreign partners ditch local banks

Foreign partners ditch local banks

While most banks are scaling up efforts to attract foreign strategic partners to bolster their strength, the market has also seen several foreign entities break up with their local partners.

In late November, the market saw the parting of Singapore’s Oversea-Chinese Banking Corporation (OCBC Bank) from local partner Vietnam Prosperity Bank (VPBank)

OCBC Bank reportedly disposed of its nearly 15 per cent stake in VPBank, more than 85 million shares, valued at $55 million.

The stake was transferred to a group of local investors.

VPBank said it facilitated OCBC’s withdraw as it was an opportunity to find a new strategic partner more compatible with its growth strategy.

The market has seen foreign partners withdraw from other banks as well.

Australia and New Zealand Banking Group (ANZ) sold its 9.73 per cent stake in local partner Sacombank to Eximbank, a domestic group.

It was rumoured that ANZ left after failing to find footing with Sacombank’s Board of Directors.

The two banks had previously mulled cooperation in several areas, but once ANZ became a wholly foreign-owned company in Vietnam it cancelled these plans, including a card centre that was near completion.

“Splits are inevitable when investors cannot find a common voice with their partner and have difficulty participating in the governance of their local partner banks,” said one executive from a foreign bank in Vietnam.

General director of Saigon Commercial Joint Stock Bank Vo Tan Hoang Van said that to ensure a suitable strategic partner, banks should discuss their cooperation ideas and plans to ensure there is a mutual understanding.

vir