KEB Hana Bank has agreed to acquire a stake of 15% in the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) for KRW1 trillion (£680m).
As part of the agreement, the Vietnamese state-owned bank BIDV will issue 603,302,706 stocks as private placement to KEB Hana Bank, which is a subsidiary of South Korean bank holding company Hana Financial Group.
Transaction to help KEB Hana Bank foray into the Vietnamese market
According to Hana Financial, the stake in BIDV will pave way for its entry into Vietnam, while securing sources for its growth in the mid- to long-term.
BIDV and KEB Hana Bank are expected to execute the required procedures in compliance with laws of Vietnam and South Korea to close the deal shortly.
Founded in 1957, BIDV is considered to be among the largest lenders in Vietnam. As of 30 June 2019, the Vietnamese bank’s total assets were more than VND1.37 quadrillion (£47.25bn).
The Vietnamese lender is engaged in a range of fields like banking, insurance, securities, and financial investment among others. It has a network of more than 1,000 branches and transaction offices in addition to having commercial footprint and representative offices outside of Vietnam.
On the other hand, KEB Hana Bank apart from having a broad network in South Korea is said to have 144 transaction points in 24 countries. As of 30 June 2019, the South Korean retail bank had total assets of $308.3bn (£247.6bn).
KEB Hana Bank was formed through the merger of Hana Financial Group’s Hana Bank and Korea Exchange Bank (KEB) in 2015. KEB was acquired by Hana Financial from Loan Star, a US-based buyout fund, for $3.43bn (£2.76bn) in 2012.
Earlier this month, KEB Hana Bank entered into a partnership with cross-border payments major Western Union to enhance payment services for its customers. As part of the collaboration, Western Union will enable the South Korean bank to provide its own brand of international money movement through a new mobile app called ‘Hana EZ’.
The mobile app, which will be synced with Western Union’s Worldwide Pay-Out Network, will enable the KEB Hana Bank’s customers to send money from their smartphones for pay-out in cash in more than 200 countries and territories.
