Commonwealth Bank is ramping up its push into Asia, detailing plans to take an up to 20 per cent stake in Vietnam International Bank.
The investment, for an undisclosed amount, follows CBA last year entering into an alliance with VIB, where CBA sent staff to advise on a range of business areas from risk management to retail banking. VIB currently ranks as Vietnam’s eighth biggest joint-stock bank.
The two banks plan to engage in an ongoing working partnership to investigate other business opportunities moving forward.
Commonwealth Bank has quietly been building up its footprint in Asia over past decade. It is one of the biggest international banks operating in Indonesia.
CBA also has investments and information partnerships in two banks in China – a 20 per cent stake in Qilu Bank in Jinan and 19.9 per cent in Bank of Hangzhou.
“The Commonwealth Bank’s track record in China is a great indication of how it works with its strategic partners in Asia to create long-term sustainable value to a business,” said VIB Chairman Han Ngoc Vu.
VIB has achieved a compound annual asset growth rate of more than 40 per cent in the past five years and branch number have more than tripled from 30 to 117.
Commonwealth Bank’s head of international financial services Simon Blair said Vietnam remains well positioned for long-term growth.
“With a young population of 87 million, a rapid uptake of internet and mobile phone technologies and only around 15% of the population currently using banking services, we expect the demand for financial services in Vietnam to increase significantly in the coming years,” Mr Blair said.
“We are confident we can help VIB become one of the best performing banks in Vietnam and in turn form a long lasting commercial relationship between our organisations,” Mr Blair said.
Upon completion of the transaction, Commonwealth Bank expects to hold two seats on an expanded VIB board of directors.
Completion of the transaction is subject to regulatory requirements and approvals.
ejohnston@theage.com.au
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