Commonwealth Bank acquiring Vietnam International Bank's 15% stake

CBA bought $235mln VIB shares to capitalise on Vietnam's surging banking demand based from country's demographics.

The Commonwealth Bank of Australia is buying a 15 percent stake in Vietnamese partly private bank VIB for an undisclosed sum, becoming the 11th foreign bank to buy shares in a Vietnamese lender.

The deal would make CBA, Australia's No.2 lender, a strategic investor in Hanoi-based VIB, or the Vietnam International Bank, which ranks ninth in assets among Vietnam's 39 partly private lenders, the two banks said in a joint statement.

The banks agreed that by the end of 2011, CBA would own a 20 percent stake in the VIB, pending Vietnamese government approval, the statement said.

VIB was valued at $235.2 million, based on its share price of around 18,500 dong ($0.98) in the unofficial, unregulated market.

The bank had achieved compound annual asset growth rate of more than 40 percent in the past five years and the number of branches grew to 117 from 30, said Chairman Han Ngoc Vu.

Simon Blair, head of international financial services at CBA, said he expected demand for financial services to grow, given Vietnam's demographics and low bank penetration.

View the full story in< Reuters.