United Overseas Bank (UOB), Singapore's second-biggest bank, said on Tuesday it had reached an agreement over a possible strategic investment in Vietnam's Southern Commercial Bank and was examining the bank's books.
Several Singapore companies have announced, or are looking at, investments in Vietnam as part of a broader regional expansion. Singapore's third-biggest bank, Oversea-Chinese Banking Corp. , last year bought a 10% stake in VP Bank for 15.7mio US$.
"Parties are now negotiating the definitive agreements for the investment and UOB is currently conducting due dilligence on Southern Bank," UOB said in a statement. It gave no financial details.
Established in 1993, Southern Commercial Bank is a joint stock commercial bank with assets of 8 trillion VNDong (498mio US$), 44 branches and about 1,060 staff.
HSBC bank said in a research report in November that Vietnam's joint stock banks are small in size and controlled only 15% of the lending market in 2005, while state-owned commercial banks controlled 75% of the lending market.
HSBC said that Southern Commercial Bank is unlisted and trades on Vietnam's over-the-counter market with an estimated market capitalisation of $135mio US$.
Source: Reuters
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