HANOI: Japan's Mizuho Corporate Bank on Friday said it would buy a 15 percent stake in Vietnam's largest bank by market capitalisation to take advantage of economic growth in the Southeast Asian nation.
Mizuho Corporate (MHCB) signed the deal, worth about $567 million, with the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) in Hanoi.
"As a result, MHCB will be Vietcombank's largest private shareholder and only next to the government of Vietnam," the Japanese institution said in a statement, adding that Vietcombank had total assets of more than $16 billion as of June 30.
The Japanese bank said Vietnam and its neighbours had high growth potential, giving "expectation of widening business opportunities for Japanese corporations going forward in Vietnam, as large-scale infrastructure projects progress and markets expand".
Several other overseas financial institutions hold strategic stakes in Vietnamese banks.
"We think Vietnamese banks require more capital than would be the case for those in most other Asian countries due to a more volatile and challenging operating environment, high loan growth and under-provisioning," Moody's Investors Service said in a report this month.
Analysts have expressed concern that the amount of bad loans held by Vietnamese banks is higher than officially reported, and that the country's struggling smaller financial institutions should be consolidated.
-- Dow Jones Newswires contributed to this story
Copyright AFP (Agence France-Presse), 2011
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