Ho Chi Minh City, Vietnam, October
24, 2002—the International Finance Corporation (IFC), the private
sector development arm of the World Bank Group, today signed a Subscription
Agreement to make an equity investment of up to US$3 million for a 10 percent
stake in Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank). This
transaction represents IFC’s first investment in a Vietnamese bank and
demonstrates IFC’s intention to promote banking development in Vietnam.
Mr. Karl Voltaire, Director of IFC’s Global Financial Markets Department
who is on an official visit to Vietnam, said, “This investment will help
strengthen Sacombank’s capital base and institutional capacity, and assist
the bank in its ongoing effort to achieve international operating and governance
standards. Improving standards in the banking sector is a key step
toward strengthening the country’s financial infrastructure.”
Sacombank Chairman Mr. Dang Van Thanh said, “IFC’s equity participation
will help further improve our professional skills and accelerate the introduction
of international banking best practices.” He added, “We believe
our cooperation with IFC will be successful.”
Established in 1992 through a merger of four credit cooperatives, Sacombank
has grown rapidly to become the second largest of the joint-stock banks
in Vietnam today. Headquartered in Ho Chi Minh City operating in
other major cities and provinces in the country, Sacombank offers comprehensive
commercial banking services primarily to SMEs and individuals. As
of August 31, 2002, Sacombank had total assets of $242 million and shareholders’
equity of $19 million.
Sacombank has a diversified shareholding structure, with Refrigeration
Electrical Engineering Corporation (a Vietnamese listed company) and Dragon
Financial Holdings (whose parent, Dragon Capital Group, runs the Dublin-listed
Vietnam Enterprise Investment Limited Fund) each holding 10 percent. The
remaining 80 percent is held by some 6,000 individual shareholders (including
many employees of Sacombank), of which the largest shareholding is 5 percent.
IFC’s mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people's lives. IFC
finances private sector investments in the developing world, mobilizes
capital in the international financial markets, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $34 billion of its own funds and arranged
$21 billion in syndications for 2,825 companies in 140 developing countries.
IFC’s committed portfolio at the end of FY02 was $15.1 billion,
with an additional $6.5 billion held for participants in loan syndications.