SMBC in talks to acquire additional 5% stake in VPBank

Sumitomo Mitsui Banking Corporation (SMBC), a subsidiary of Japan's Sumitomo Mitsui Financial Group (SMFG), is in negotiations to acquire an additional stake in Vietnam's VPBank, aiming to increase its ownership to 20%. However, the two parties have yet to reach an agreement on the valuation, according to Reuters. The negotiations have been ongoing for several months, with SMBC reportedly looking to finalize the deal within the year. VPBank is seeking a higher price for its shares than the current market rate. In 2023, SMBC paid a premium of about 40% above market price, equivalent to approximately $1.5 billion, to secure a 15% stake in the Vietnamese bank. This time, however, the Japanese firm is reportedly unwilling to accept a similar premium and is internally discussing the possibility of increasing its stake through open market transactions rather than a private placement. The acquisition of additional VPB shares would enhance SMBC's access to Vietnamese consumers and businesses amid the nation's pursuit of rapid economic growth and foreign investment attraction. Both VPBank and SMBC declined to comment on the matter. Following the news, VPBank's stock (VPB) rose over 4% to VND 23,000 per share at the close of trading on September 25. The stock had reached its upper trading limit at one point during the session. VPBank's market capitalization has increased by over 12% in the past six months. SMBC is one of Japan's three largest financial institutions, established in 2001, managing trillions of dollars in assets and operating in over 40 countries. In Vietnam, SMBC was a strategic shareholder of Eximbank from 2007 but divested its stake in 2023. Subsequently, the Japanese bank acquired a 15% stake in VPBank for $1.5 billion. Additionally, SMBC holds a 49% stake in FE Credit, a subsidiary of VPBank. Established in 1993, VPBank is currently one of the largest private banks in Vietnam. For the first half of the year, the bank's consolidated pre-tax profit reached nearly VND 18.9 trillion, a 68% increase year-on-year, completing nearly 46% of its full-year plan.