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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 enterprises.”
“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.”
About IFC
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
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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/
About Vietinbank
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
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