|The cooperation between banks is becoming more important|
Vietnam International Bank will hold its second shareholders meeting of the year this week after officially taking on Commonwealth Bank of Australia as sole foreign strategic partner.
Since early September, CBA and VIB have completed arrangements for a strategic partnership in Vietnam. After regulatory approvals were confirmed in Vietnam, CBA has taken a 15 per cent stake in VIB, becoming its exclusive foreign strategic shareholder. This 60 million share sale to CBA will help VIB increase its chartered capital by VND600 billion to VND4 trillion ($205 million).
“Commonwealth Bank’s track record in China is a great indication of how it works with its partners in Asia to create long-term sustainable value to a business. We are looking forward to seeing the opportunities of this partnership develop quickly in Vietnam’s high-growth banking market,” said VIB chairman Han Ngoc Vu.
CBA is a leading financial institution in Australia and one of the top 20 safest banks in the world. With 100 years of development history, CBA’s capitalisation reached $785 billion by end of 2009, it was one of the 20 global banks with largest capitalisation.
In Asia, CBA has successfully expanded into fast-growing markets such as China, India and Indonesia. As part of the investment arrangements, a long-term ‘capability transfer programme’ (CTP) will begin next month at VIB. The programme replicates the successful programmes in place with CBA’s partner banks in China.
The CTP is expected to help VIB further enhance its operational and commercial capabilities, risk management and competitiveness. A team of banking specialists from CBA will work with the business on the ground in Hanoi to identify opportunities in critical business areas including retail banking, risk management, human resources, IT, treasury and finance. The arrangements will span the next five years and include shared business initiatives which are expected to see VIB emerge as a full service bancassurance group.
CBA group’s international financial services executive Simon Blair said the partnership was a good match for both banks as they both have a common focus on customer service, growth in retail and small-to-medium business banking, people development and shareholder value.
“Especially, VIB’s priority to grow retail and small-to-medium business banking is also consistent with our group’s strategy in Asia. We are confident our partnership can help VIB lift its already strong performance even further, and in turn, form a long lasting commercial relationship between our organisations,” said Blair.
Consistent with the strategic partnership agreement signed earlier this year, CBA intends to request an increase in the VIB investment to 20 per cent stake at the earliest opportunity - the maximum investment allowed by the State Bank.
The global financial market is changing quickly and the cooperation between banks becomes more and more important. Thus, over the past years, local banks in Vietnam have been looking for strategic partners being leading financial institutions in the world. However, it is not an easy process. On the other side, the sub-prime crisis has certain negative effects on large financial institutions.