The Hanoitimes - French international banking group BNP Paribas sold its entire 74 million shares holding in the local Orient Commercial Bank (OCB), or 18.86% capital, ending a 10-year strategic alliance between the two banks.
Despite the transaction was completed on December 26, 2017, details on the deal as well as the buyer’s name have yet been disclosed. Mr. Aymar De Liedekerke Beaufort, CEO of BNP Paribas of Ho Chi Minh Branch did not elaborate more on the divestment from OCB in a reply sent to Hanoitimes.
“Vietnam has been evolving as an attractive destination for multinational corporation to set-up and expand operations” said Mr. Beaufort, thus, the divestment from OCB does not affect BNP Paribas’s operation in Vietnam’s financial sector.
CEO of BNP Paribas of Ho Chi Minh Branch, Mr. Aymar De Liedekerke Beaufort
That said, the lender now focuses on developing their own client franchise in Vietnam through branches in Ho Chi Minh and Hanoi. “Our capital investments total US$150 million and are in addition to our significant stake in Vietcombank - Cardif Life Insurance,” he added. “We see offshore interest in Vietnam continuing to grow in line with the country’s strong economic development.”
With Vietnam in its focus, BNP Paribas will continue its support to local corporates in their expansion, fund raising and risk management needs. "Our capital markets expertise is benefitting Vietnamese financial institutions and from a corporate advisory standpoint, we continue bring strategic investors to the growing domestic market, as well as facilitate access to European markets" - he concluded.
BNP Paribas acquired an initial 10% OCB’s equity stake in 2007 and raised its shares to 20% in 2011. However, the recent move of the French bank has caught the market by surprise, especially when there is a growing trend of foreign investors taking up interests in Vietnam’s banking sector.
OCB previously capped the foreign ownership limit (FOL) at the bank to be at 23.66% of capital, but following the divestment from BNP Paribas, the FOL has been now reduced to 4.98%, said OCB in a statement on December 27 2017.
In a related move, Vietcombank also sold more than 13.1 million OCB shares on December 29 with the average price of VND13,005 (US$0.57) per share, raising over VND171 billion (US$7.6 million) in return.
At present, the price of OCB share in the Over – the – counter (OTC) market is approx. VND15,000 (US$0.66) per share. By the end of Quarter II, 2017, total assets of OCB reached VND70.8 trillion (US$3.1 billion), an increase of 11% over the last year’s figure. OCB reported a pre-tax profit of VND789 billion (US$35 million).