Vietnamese banks plan nearly $7 billion in share sales as economy drives capital demand
Vietnamese banks are planning nearly $7 billion in share sales by end of 2026, driven by rapid economic growth and a push from top leader To Lam to boost infrastructure spending. The wave of capital raising, the largest in the country's history, opens the door for foreign investors to increase stake
HANOI — Vietnamese banks are planning nearly US$7 billion in share sales as the country's fast-growing economy fuels demand for capital, opening a window for foreign investors to expand in the tightly controlled sector. Communist-run Vietnam, which reported growth of nearly 10 per cent in the last quarter, has one of Asia's fastest-growing banking industries but access has been restricted, with cumulative foreign ownership capped at 30 per cent, individual stakes limited to 20 per cent and offshore borrowing subject to strict limits.
In recent months, top leader To Lam's drive to turbocharge economic growth with major infrastructure spending has ushered in a more open approach, as policymakers view larger foreign participation as necessary to meet growing credit demand amid a domestic funding squeeze. The share sales could raise nearly US$7 billion by the end of next year, according to Reuters calculations based on public disclosures and a Fitch Ratings report, which noted that this was likely Vietnam's largest-ever wave of capital raisings by lenders.
The ceiling on offshore borrowing was also raised this year by 11 per cent to US$6.1 billion and it could rise further. Three local lenders have been allowed to increase their foreign ownership limits to 49 per cent, while stock-market reforms secured Vietnam's upgrade to emerging status by index provider FTSE Russell last month. Separate plans to set up international financial centres also promise more foreign capital inflows.
Japan's Sumitomo Mitsui Banking Corp is in talks with Vietnamese partner VPBank to raise its stake to 20 per cent from 15 per cent as VPBank seeks a private placement worth US$560 million at current market prices, Reuters reported in September. VPBank is allowed to raise its foreign ownership cap to 49 per cent. Vietcombank, the country's largest lender, has also unveiled plans to sell 6.5 per cent of its shares by the end of this year in a transaction worth around US$1.2 billion at current prices. Japan's Mizuho Bank, its current largest foreign investor with a 15 per cent stake, may potentially increase its holding, according to minutes from a Vietcombank shareholder meeting in April. Mizuho declined to comment.
BIDV, Vietnam's second-largest lender, sold roughly 3 per cent of its shares to dozens of investors in March and intends to sell almost another 11 per cent by the end of next year for a total value of approximately US$1.4 billion, according to public disclosures. Its top foreign shareholder, South Korea's KEB Hana, did not participate in the first placement but is considering whether to participate in the new plan, a spokesperson said. HDBank has said it plans to sell a 10.7 per cent stake by the end of next year. The private bank, linked to Vietnam's largest private airline Vietjet, does not have a large foreign investor and is allowed to raise its foreign ownership to 49 per cent.
Vietnam is allowing more foreign capital into its banks as it is beginning to rethink how its next phase of growth will be financed, said Quynh Nguyen, a finance lecturer at Hoa Sen University in Ho Chi Minh City. She cautioned, however, that the move was selective and did not amount to a wholesale liberalisation. The equity sales have been driven by the need to bolster capital as Vietnam transitions to stricter global Basel III requirements by 2030. The need has become pressing because of rapid loan growth, which Moody's-backed VIS Rating said could further deteriorate loss-absorption buffers.
