Domestic banks strengthen international partnerships

Domestic banks strengthen international partnerships

With central banks worldwide returning to monetary easing, the potential influx of cheap capital may drive domestic banks to pursue opportunities abroad.

Vietnamese banks must enhance capital liquidity capacity in alignment with standards

At a meeting between the government and commercial banks on February 11, Nguyen Thi Phuong Thao, permanent vice chairwoman of the board at HDBank, stated that following her meeting with the US President Donald Trump, HDBank and its partners were currently collaborating on implementing contracts worth $48 billion with major US corporations.

“This cooperation will create nearly 500,000 jobs. Negotiations are ongoing to increase the transaction value to $64 billion,” Thao said.

The government’s overarching goal is to achieve 8 per cent GDP growth upward in 2025, while the State Bank of Vietnam (SBV) has set an industry-wide credit growth target of 16 per cent. To contribute to these objectives, HDBank will engage in international partnerships to encourage and provide capital for enterprises involved in productivity enhancement and technological applications.

“HDBank will participate in financing projects that drive public investment, transport infrastructure, logistics, expressways, aviation infrastructure, and seaports. We will also provide capital for smart logistics systems to reduce transportation costs and enhance the competitiveness of Vietnamese enterprises,” Thao said. “We will fund tourism and service businesses, prioritising digital technology adoption and integration with modern global consumer ecosystems.”

At the same meeting, Do Quang Hien, chairman & CEO of T&T Group, revealed it had recently engaged with Boeing representatives in Vietnam to explore collaboration opportunities and establish a strategic partnership in the aviation sector.

“T&T is implementing a strategy to develop an aviation conglomerate model, including the Quang Tri Airport, Vietravel Airlines, and an aviation industrial and airport city complex in Quang Tri. This move follows Quang Tri People’s Committee’s endorsement of proposals for Quang Tri Airport City urban planning,” Hien said.

He highlighted that several major airlines from the US, the Middle East, and the Netherlands have successfully developed an aviation ecosystem-conglomerate model. This ecosystem encompasses airlines, industrial manufacturing, airports, services, maintenance, repair, overhaul, flight services, ground handling, and airport city complexes.

“This development strategy will lay the foundation for an integrated aviation industry complex, encompassing transportation and logistics. Currently, Vietnam lacks an airline or enterprise specialising in dedicated cargo flights, with this market segment still largely dominated by foreign carriers,” Hien said.

Under the EU-Vietnam Free Trade Agreement, Vietnam pledged to consider allowing two European credit institutions to hold up to 49 per cent of the charter capital in two Vietnamese banks within five years, excluding state-owned banks.

This timeline has reached maturity, enabling banks undergoing mandatory transfers to seek European strategic partners with ownership stakes of up to 49 per cent.

This implies that MB and Vietcombank, which recently took over CBBank and OceanBank under mandatory transfer agreements, may see their foreign ownership limits increased from 30 per cent. Consequently, they are expected to seek foreign strategic investors to leverage this preferential mechanism.

Currently, the number of domestic banks with foreign strategic shareholders is limited, with VietinBank partnering with MUFG Bank, BIDV with KEB Hana Bank, Vietcombank with Mizuho, VPBank with Sumitomo Mitsui Banking, and OCB with Azora Bank.

Significantly, the SBV is currently soliciting feedback on a draft circular regarding capital adequacy ratios for commercial banks and foreign bank branches, aiming to update regulations in alignment with Basel III standards. According to the central bank, these standards represent the benchmark for Vietnam’s banking system.

“Vietnamese banks must enhance their capital quality and liquidity capacity in accordance with these standards, providing a foundation for a sustainable banking system with resilience to shocks and the ability to recover from crises while preventing systemic risks,” an SBV representative said.

After receiving SBV approval to increase its charter capital through a private placement, BIDV bank plans to issue 123.8 million shares to professional investors in Q1, priced at $1.55 per share. The expected proceeds from this issuance amount to $192.12 million, bringing its charter capital $2.81 billion.

The issuance includes participation from four foreign investors and one domestic investor. Vietnam Enterprise Investments Ltd. has registered to purchase nearly 59 million shares, accounting for 47.7 per cent of the offering.

Hanoi Investments Holdings Ltd., DC Developing Markets Strategies Plc., and Samsung Vietnam Securities Master Investment Trust have registered to buy 15.7 million, 8.5 million, and over 1.9 million shares, respectively. The domestic investor, State Capital Investment Corporation, has registered to acquire 38.7 million shares.

VIR