Japan’s Sumitomo Mitsui Banking Corp. (SMBC) is in advanced negotiations to raise its stake in Vietnam’s VPBank to around 20%, strengthening the Japanese lender’s presence in one of Southeast Asia’s fastest-growing banking markets.
SMBC, the banking subsidiary of Sumitomo Mitsui Financial Group, currently owns 15% of VPBank after investing $1.5 billion in 2023. The two companies are seeking to finalize an additional stake purchase this year, Reuters reported, citing people familiar with the discussions.
However, valuation remains a key obstacle. VPBank is reportedly seeking a significant premium over its current market price, while SMBC has been hesitant to pay a premium comparable to the roughly 40% it agreed to when acquiring its initial stake.
SMBC has also explored purchasing VPBank shares through the open market instead of completing the transaction through a private placement. Based on current market prices, an additional 5% holding in the Vietnamese bank would be valued at approximately $425 million.
Separately, VPBank is discussing a potential share sale to foreign investors that could generate between $700 million and $900 million. Such a transaction could bring additional...