|A riverside view of Ho Chi Minh city / gettyimagesbank|
By Kim Bo-eun
Banks are accelerating efforts to capture opportunities in Vietnam's fast-growing market. KEB Hana Bank said Monday it signed a deal to acquire 15 percent of the Bank for Investment and Development of Vietnam (BIDV)'s shares, at a cost of 1.25 trillion won. BIDV is Vietnam's largest bank by assets.
The State Bank of Vietnam held a 95.3-percent stake in BIDV, a state-run commercial bank. It has affiliates in stock brokerage, insurance and asset management.
BIDV's assets amounted to 66.3 trillion won as of the end of 2018 and the bank posted 381 billion won in net profit.
The bank has focused on corporate loans, and KEB Hana Bank's investment is set to help expand its business into retail finance, as well as boost its digital banking and risk management capabilities.
KEB Hana is seeking for BIDV to expand cooperation with other affiliates of Hana Financial Group in the Southeast Asian country.
KEB Hana Bank has two branches in Vietnam ― one in Hanoi and the other in Ho Chi Minh.
"We believe the investment in BIDV will help Hana Financial Group's affiliates expand their base in Vietnam," a KEB Hana Bank official said.
Korea's four major banks ― Shinhan, KB Kookmin, KEB Hana and Woori ― logged a total of $132 million in net profit from business in Vietnam last year. This was a 120 percent growth from the figure of a year earlier.
Shinhan has led efforts to establish a presence in Vietnam, entering the country in 1993.
Shinhan Bank Vietnam has 32 branches, which is the largest number of branches among foreign banks in the country.
Shinhan aims to go beyond being the No.1 foreign bank and compete with major local banks.
The bank generated 96.6 billion won in net profit in 2018, which was 26 percent of Shinhan's global net profit.
Shinhan Financial Group's affiliates in Vietnam posted a total of 124.4 billion won in net profit last year.
Shinhan Card launched Shinhan Vietnam Finance Company earlier this month, after acquiring Prudential Vietnam Finance Company to expand Shinhan's card business in the Southeast Asian country.
KB Kookmin Bank has two branches in Vietnam and Woori Bank nine.
The banks, which mainly offer corporate loans, are seeking to expand into retail finance. They are also planning to increase the portion of Vietnamese customers, as they have mainly been tending to Korean customers there.