Asia market round-up: Foreign forays into Vietnam’s reforming bank market

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Asia market round-up: Foreign forays into Vietnam’s reforming bank market

Vietnam’s reforming bank market is learning the lessons of its northern cousin. Foreign banks are lining up to pour money into local banks, hungry for a position in what will be a lucrative, if crowded, domestic market.

As with China... so in Vietnam.

Latest to take the plunge is Deutsche Bank, which in February announced a deal with Hanoi Building Commercial Joint Stock Bank to buy up to 20% of the stock, subject to necessary approvals. Financial terms were not disclosed, but Deutsche Bank will probably have paid a huge multiple of current book value. It is in good company: ANZ, Standard Chartered, Citi, HSBC and OCBC have all signed deals with local banks at hair-raising valuations.

Foreign forays into Chinese banks, although not liquidated, have been handsomely profitable marked to market, helped by exceptionally benign markets. Whether foreign bank investments in Vietnam’s banks will prove similarly lucrative will also depend largely on similar, if unlikely, market conditions.

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