VIB raises $260 million in loan agreement
VIB raises $260 million in loan agreement
The Asian Development Bank (ADB) and Vietnam International Bank (VIB) have announced a $260 million syndicated loan agreement to enhance financing for small- and medium-sized enterprises (SMEs), private businesses, and individual customers.
The funding comprises a direct ADB loan of $100 million and a syndicated loan of $160 million arranged by ADB and United Overseas Bank Ltd. (UOB) from nine prestigious banks headquartered in Asia. Following this funding, VIB will increase financing for individuals to buy or repair houses and for private business activities and enterprises in Vietnam.
VIB will also cooperate with ADB to implement the Technical Assistance (TA) programme for female entrepreneurs with a budget of $500,000 from The Women Entrepreneurs Financial Initiative Fund. This is the first TA grant provided in Vietnam that exclusively helps a bank to promote women's entrepreneurship.
Speaking about the agreement, VIB CEO Han Ngoc Vu stated, “The agreement reaffirms our existing partnership with ADB and the parties’ efforts in promoting financial access for individual and SME clients. This is a timely development because SMEs currently have a high demand for capital to restore and develop production after the pandemic, and contributions are needed to improve living conditions for individual customers”.
Nearly all businesses registered in the nation are classified as SMEs, contributing to 40 per cent of the country’s GDP and 50 per cent of employment in 2019. However, there are challenges for the growth potential of SMEs, including access to financing. A survey in 2017 found that only 37 per cent of female SME owners and 47 per cent of their male counterparts had received loans from banks in the preceding two years.
General director for Private Sector Operations at ADB Suzanne Gaboury explained, “Banks play a vital role in addressing the issues related to financial access for SMEs and individual household borrowers to ensure an inclusive and sustainable development path for Vietnam. This agreement is one element of the project to strengthen the banking sector and help facilitate financing for individual customers and SMEs.”
Lim Lay Wah, head of Financial Institutions Group at UOB said, “We have been contributing to Vietnam’s economic growth and the continued development of the financial industry for more than 20 years. Our goal is to work with like-minded partners to help drive progress and to forge a sustainable future for generations to come. By working with ADB and VIB, more individuals and companies will benefit from access to much-needed funding as they navigate the pandemic and emerge stronger.”
The successful mobilisation of foreign capital contributes to VIB's brand reputation in the international financial market. Particularly in Vietnam, VIB has continuously led the industry thanks to a solid foundation for business operations, digital transformation, and risk management. It has transformed into a retail banking model with a retail lending ratio of nearly 90 per cent of the credit portfolio, twice the industry average.
From 2017 to 2021, VIB's pre-tax profit increased by 11 times, and capital and total assets both increased three-fold. Since 2018, the bank has continuously been at the top of the industry and far exceeded the industry average in terms of operational efficiency with the return on equity in 2021 reaching 31 per cent, 1.7 times the average at 18 per cent.
After more than a year of listing on the Ho Chi Minh City Stock Exchange, VIB's stock is highly appreciated for its positive growth rate. At the end of last year, its market capitalisation reached more than $3.2 billion, ranking in the top five among joint-stock commercial banks.
With outstanding financial results and constantly increasing sustainable benefits for shareholders, VIB has confirmed its position in the top billion-dollar enterprises in terms of market capitalisation, the top 50 most effective companies in Vietnam, and leading enterprises in the market.
With the successful mobilisation of syndicated loans in the international market, great value, attractive interest rates, and beneficial terms, VIB will continue to extend credit to serve customers' needs. Its profit margins will be optimised during this potential growth period to maintain its position among the industry leaders.
