Seoul-based commercial bank KEB Hana Bank has agreed to buy a 15 percent stake in Vietnamese state-owned Commercial Bank for Investment and Development of Vietnam (BIDV) for 1 trillion won ($849.6 million), it announced on July 22.
BIDV will issue some 603.3 million new shares to KEB Hana in exchange for cash. The plan has gained approval of the board of directors.
The transaction, slated on Dec. 31, will make KEB Hana the second-largest stakeholder of BIDV. The State Bank of Vietnam currently owns 95.3 percent of BIDV, whose stock ownership will get lowered to 81 percent after the transaction.
Hanoi-based BIDV is the largest commercial bank by total assets that reached 1,313 trillion dong ($56.4 billion) as of end-2018, up 9.2 percent on-year. Its operating income came to 44.5 trillion dong, up 14.1 percent. It is considered one of the four major commercial banks along with Vietcom Bank, Vietin Bank and Agri Bank.
Founded in 1957, BIDV has operations in commercial banking, securities, insurance and finance lease.
KEB Hana currently operates two branches in Vietnam -- in Hanoi and Ho Chi Minh.
The bank said its strategic investment will diversify revenue source of BIDV in search of ways to expand consumer financing business.
Its assets came to 340.3 trillion won as of end-2018.
By Son Ji-hyoung (firstname.lastname@example.org)