Sacom to invest $24.7 mln in new bank

Vietnam telecommunications cable maker Sacom (SAM) plans to invest 400 billion dong ($24.7 million) in a 20-percent stake in a start-up bank, its chief executive said on Thursday.

Sacom, Military Bank and major construction firm Song Da Urban & Industrial Zone Investment and Development Joint Stock Co (SJS) would each contribute 10 percent to form the bank, Sacom Chief Executive Officer Do Van Trac said.

"The application for a licence is with the central bank and we expect it soon as we have prepared all the details required," Trac told Reuters on the sidelines of a conference in Hanoi.

Other investors in the bank, to be called Kinh Bac Bank, included the Vietnam Motor Industry Corporation (Vinamotor) and Duc Giang Garment Company, he said.

"The bank operation would rely on these investors with their working capital," Trac said.

When licensed, the bank would operate in Bac Ninh province, Haiphong, Hanoi, Ho Chi Minh City, Danang and Can Tho, Trac said.

Ho Chi Minh City-based Sacom had 1.7 trillion dong ($105 million) in surplus cash after a share issue and it was looking to invest the money, Trac said on on-line chat with investors after the conference.

More than 30 partly private banks are operating in Vietnam, where five state-run commercial banks account for 70 percent of lending.

Based in the southern province of Dong Nai, Sacom -- one of Vietnam's first two listed firms -- initially manufactured electrical and telecommunications cables.

But in recent years it has been seeking to branch out into real estate and telecoms services.

Trac said Sacom would invest in a $30 million office building in Ho Chi Minh City and also a resort including a golf course in the Central Highland province of Lam Dong.

He did not provide a forecast of the firm's results this year, but said 70 percent of Sacom's revenues so far had come from VNPT, the country's top telecoms group, while the military-run telecoms firm Viettel contributed 20 percent.

VNPT has a stake of about 31 percent in Sacom.

Many Vietnamese companies have rushed to seek central bank licences to set up commercial banks to cash in on the relatively new but highly lucrative domestic sector, analysts said.

Refrigeration firm REE (REE) also told investors on Thursday it would invest about $10 million in shares in two start-up banks.

Source: Reuters