Hanoi, Vietnam, January 25, 2011—IFC,
a member of the World Bank Group, and IFC Capitalization Fund signed agreements
today to support the partial privatization of Vietnam’s banking sector
and improve access to finance for small and midsize enterprises by investing
approximately $182 million in equity and $125 million in subordinated debt
in Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank),
one of the country’s largest state-owned commercial banks.
The IFC Capitalization Fund is a global equity and subordinated debt fund
founded by IFC and the Japan Bank for International Cooperation (JBIC).
It aims to support banks considered vital to the financial system of an
emerging market country.
The investments in VietinBank by IFC and IFC Capitalization Fund provides
long-term capital to VietinBank as it becomes the first state-owned Vietnamese
bank to allow a strategic foreign investor take an ownership stake. In
addition to the investment, IFC and VietinBank signed an advisory agreement
in October last year that will help the bank expand its small and midsize
enterprise loan portfolio, supporting the backbone of the Vietnamese economy
to spur economic growth and create jobs.
“The investment bears witness to the confidence that international financial
institutions have in VietinBank specifically and in Vietnam’s banking
sector in general,” said Pham Huy Hung, Vietinbank’s Chairman. “We welcome
the partnership with IFC and the IFC Capitalization Fund since their financial
and advisory support will help us implement VietinBank’s expansion and
modernization strategy and improve access to finance for small and midsize
“We believe this investment will help improve the confidence of the international
community in the Vietnamese market in general and the banking sector specifically,”
said Marcos Brujis, who heads the IFC Capitalization Fund.
“We are very pleased that this investment has materialized. We expect
it to support Vietinbank’s future operations and to further strengthen
the stability of the Vietnamese banking sector,” said Kentaro Tsuboi,
the Head of JBIC’s Investment Banking Department.
Karin Finkelston, IFC’s Director for East Asia and the Pacific, added:
“With IFC’s global experience in supporting the transition of state-owned
banks and enterprises in emerging economies, our investment and advice
will help strengthen both Vietinbank and the Vietnamese economy.”
IFC, a member of the
World Bank Group, is the largest global development institution focused
on the private sector in developing countries. We create opportunity for
people to escape poverty and improve their lives. We do so by providing
financing to help businesses employ more people and supply essential services,
by mobilizing capital from others, and by delivering advisory services
to ensure sustainable development. In a time of global economic uncertainty,
our new investments climbed to a record $18 billion in fiscal 2010. For
more information, visit www.ifc.org.
About IFC Asset Management Company
IFC Asset Management Company LLC, a wholly-owned subsidiary of IFC, invests
third-party capital, enabling outside investors to benefit from IFC’s
expertise in achieving strong equity returns as well as positive development
impact in the countries in which it invests. It manages the $3 billion
IFC Capitalization Fund and the $1 billion IFC African, Latin American
and Caribbean Fund.
About Japan Bank for International Cooperation
The Japan Bank for International Cooperation (JBIC) is the international
wing of the Japan Finance Corporation, Japan’s policy-based financing
institution established on October 1, 2008. It succeeded International
Financial Operations of the former JBIC and will continue to use the name
JBIC to maintain international trust and confidence it has gained. JBIC
provides policy-based finance with a mission to contribute to the sound
development of the Japanese and international economy, including finance
responding to disruptions in financial order in the international economy.
For more information, visit www.jbic.go.jp/en/
VietinBank is a leading banking and financial group in Vietnam, operating
in commercial banking, securities, insurance, fund management, gold and
precious metal trading. After over 22 years of development, the Bank has
made quantum jumps in growth, taking the key role in the Vietnamese banking
system. Currently, VietinBank possesses an extensive network of 157 branches
and nearly 1000 transaction offices across 63 provinces, cities and centralized
economic zones up and down the country. For more information, visit www.vietinbank.vn