Vietnamese Banks Plan $7 Billion Share Sales to Boost Capital

Vietnamese banks are preparing a wave of share sales to raise nearly $7 billion by the end of next year, potentially marking the largest capital-raising effort in the country's history. The initiative aims to meet rising credit demand and strengthen capital buffers as the nation transitions to Basel III requirements by 2030.

To Lam, the top leader of Vietnam, is driving this push to accelerate economic growth through increased infrastructure spending. To support these goals, policymakers have raised the offshore borrowing ceiling by 11% to $6.1 billion and permitted some lenders to increase foreign ownership limits to 49%.

Major lenders are leading the effort, with Vietcombank planning a $1.2 billion sale of 6.5% of its shares by the end of the year. The Bank for Investment and Development of Vietnam intends to sell nearly 11% of its shares for approximately $1.4 billion by the end of next year. These moves are intended to manage risks associated with rapid loan growth and rising bad debts within the real estate sector.

Foreign financial institutions are considering increasing their stakes to participate in the growth. Japan's Sumitomo Mitsui Banking Corp and Mizuho Bank, along with South Korea's KEB Hana, are among the entities evaluating further investment in the Vietnamese banking sector.