Hanoi (VNA) – Foreign investors’ continuousinvestment in Vietnam has shown their optimistic about the country’s economicoutlook, despite the difficult situation of the global banking sector. 

Recently, VPBank announcedthat it has entered into an agreement with Japan’s Sumitomo Mitsui BankingCorporation (SMBC) - a subsidiary of Sumitomo Mitsui Financial Group, Inc(SMFG) - to issue 15% of equity stake at a value of 1.5 billion USD through a private placement. The deal saw the record value in the financial sector of Vietnam so far, breakingVPBank’s own record in the 1.4-billion USD deal with FE Credit.

In the context thatthe banking system of the US and Europe is facing difficulties, the event hasan important meaning, reflecting the attractiveness of the Vietnamese economy.

SMBC CEO Jun Ohta saidthat Vietnam is an important market in the development strategy of his bank, and expressed his confidence in the Vietnamese market’s growth.

Following the latest SMBC strategicinvestment, VPBank will become Vietnam’s second largest in terms of ownerequity. Meanwhile, the deal will enable the SMBC to strengthen its presence inVietnam and have a chance to provide capital to Vietnamese projects.

This year, M&A activities are predictedto bustle in the domestic banking sector. Along with the compulsory deals ofOceanBank, CB, DongABank and GP Bank, the M&A market will be warmed up withthe divestment deals of VNPost from LienVietPostBank and similar deal ofPetrolimex from PGBank. Domestic commercial banks are also seeking foreignpartners.

In early March, the United Overseas BankLimited (UOB) announced the completion of its acquisition of Citigroup’sconsumer banking business in Vietnam. It has also appointed senior officials tooperate the expanded retail business activities in Vietnam.

Nakajima Takeo, Chief Representative of theJapan External Trade Organisation (JETRO) in Hanoi, said Vietnam is aninvestment destination that Japanese investors cannot ignore. Japan is now thelargest investor in the banking sector of Vietnam. Three largest banks of Japan – Tokyo-Mitsubishi UFJ, Mizuho and SMSB - have become the strategic shareholdersof three major banks of Vietnam – VietinBank, Vietcombank and VPBank, he noted.

With a population close to 100 million,strong digitalisation process and bright GDP outlook as well as the “go green”infrastructure development trend, Vietnam is an attractive financial market inthe region and a favourable destination for foreign investors.

Data from JETRO showed that 60% ofJapanese firms want to expand investment and business activities in Vietnam.

Masataka “Sam” Yoshida, Senior ManagingDirector & Global Head of Cross-Border Division of RECOF Corporation, heldthat investors are aiming to expand their long-term presence in Vietnam insteadof seeking low-cost assets./.