Maybank in strategic partnership with Vietnam's An Binh Bank with an acquisition of a 15% equity stake
Maybank today signed an agreement with An Binh Commercial Joint Stock Bank ("ABBank") for the acquisition by Maybank of 15% of the charter capital of ABBank for a cash consideration of approximately RM430 million. Maybank may also take up an additional 5% equity in the near future, pending approval by the Vietnam government. Current regulations in Vietnam allow foreign banks to own up to 15% equity in a Vietnamese bank with the possibility of increasing the stake to 20% subject to approval by the government.
Founded in 1993, ABBank is among the fastest growing joint stock commercial banks in Vietnam with assets growing from USD42 million in December 2005 to more than USD700 million as at 31 December 2007. It currently has a network strength of 53 branches and transaction offices spread across twenty one provinces and cities in Vietnam. The Bank plans to expand its network aggressively and operate at least 150 branches by 2010. It offers a full range of commercial banking products and services in the market and is strong in the small and medium enterprises (SME) sector. Its consumer banking market share is also growing with the introduction of innovative mortgage, automobile financing and personal loan products and services.
Upon completion of the agreement, Maybank will emerge as a major shareholder of ABBank. The Electricity of Vietnam ("EVN") Group is ABBank's largest shareholder with a 28.3% equity interest in ABBank. The other major shareholder is The Hanoi Export-Import JSC (Geleximco), which holds 7.2% equity interest in ABBank.
Signing the agreement in Ho Chi Minh City today were Maybank Chairman Tan Sri Mohamed Basir bin Ahmad and ABBank Chairman Mr. Vu Van Tien.
At the signing ceremony, Tan Sri Mohamed Basir said, "We are fully committed to developing a partnership that will see mutual success and growth of our business in this market. The proposed acquisition accelerates our growth plans in Vietnam. It opens up tremendous opportunities for Maybank to work together with ABBank, given the customer base of ABBank and its major shareholder, the EVN Group. In addition, the rapidly growing small and medium enterprises sector in Vietnam presents huge potential for us to be able to introduce more innovative financial products and services. It is a strategic investment that we are making to expand our presence in Vietnam in line with our continuous effort to establish a stronger foothold in the regional markets."
ABBank has strong established payment centres for EVN customers and provides financial services to EVN's business partners and suppliers. EVN and EVN Telecom have more than 12 million customers and 80,000 employees.
On the same day, Maybank had also entered into a strategic cooperation and knowledge transfer agreement with ABBank to reflect the long term relationship and strategic cooperation between Maybank and ABBank. This will see Maybank sharing its knowledge in improving corporate governance and internal controls, apart from providing technical assistance in consumer banking, network, treasury, business banking, risk management, human resource and information technology.
Tan Sri Mohamed Basir said, "We look forward to a fruitful partnership that will enable us to operate more competitively and jointly generate value creation opportunities to benefit our customers and franchise."
"I am sure that with ABBank's extensive network spread across 21 provinces and cities in Vietnam, our combined strengths in this partnership will increase our ability to penetrate the mass market with more innovative retail products and services at a lower cost. We firmly believe that our partnership with ABBank will pave the way for us to jointly tap the mass market quicker and more efficiently," he added.
Vietnam continues to be an attractive market as Asia's second fastest growing economy after China with rising domestic consumption, trade expansion and investments as the main drivers for growth acceleration. Vietnam's GDP has been growing at above 8% over the last 3 years.
Maybank has an existing presence in Vietnam with two branches. It established its operations in Vietnam in 1995 via the opening of the inaugural branch in Hanoi. In 2005, it expanded its presence to Ho Chi Minh City. It supports mainly Malaysian and Singaporean businesses operating in Vietnam offering a range of banking products and services covering loans and advances, project financing, trade financing, remittances and deposit taking. The Bank has seen strong growth in its Vietnam operations, registering year-on-year loans growth of 29% and deposits at 42% as at February 2008. The strategic partnership with ABBank will complement the Bank's existing presence in Vietnam.