Warburg to make biggest Vietnam bet with US$370m deal

[SINGAPORE] Warburg Pincus is making its biggest bet in Vietnam, agreeing to invest more than US$370 million in Techcombank as the lender prepares to list on the local exchange.

Techcombank plans to use proceeds from the investment to fund expansion, according to a Monday statement from the bank. The deal will be Warburg Pincus's largest private equity investment in Vietnam and brings its commitment in the Southeast Asian nation to more than US$1 billion, the statement shows.

Warburg Pincus has been involved in US$11.4 billion of completed deals in Southeast Asia since 2013, when it began investing in the region, according to data compiled by Bloomberg. The firm led a group that bought 20 per cent of Vincom Retail JSC, the mall operator that completed an equity offering last year. Warburg Pincus said last month that it's forming a joint venture to develop industrial properties in the country.

"Vietnam is one of the fastest growing banking markets in Southeast Asia," Warburg Pincus's head of Southeast Asia, Jeffrey Perlman, said in the statement. "We expect TCB to further consolidate its dominant position in Vietnam and become one of the leading banks in Southeast Asia." Warburg Pincus's investments in the region include Singapore's ARA Asset Management Ltd, which runs property funds in Asia, as well as ride-hailing provider PT Go-Jek Indonesia, Bloomberg-compiled data show.

The investment in Techcombank will be made through two separate legal entities that Warburg Pincus manages, according to the statement. The deal has been cleared by the State Securities Commission and is awaiting final approval from the State Bank of Vietnam, Techcombank Chief Executive Officer Nguyen Le Quoc Anh said in a phone interview Monday.

Deutsche Bank AG, Morgan Stanley and Viet Capital Securities JSC are advising the company on its planned listing, he said. The Hanoi-based lender's shares were quoted at 90,000 dong each Monday afternoon in Vietnam's over-the-counter stock market, giving it a value of 105 trillion dong (S$10.02 billion), according to SanOTC, a website that tracks OTC prices.

Techcombank, whose investors include local conglomerate Masan Group, is formally known as Vietnam Technological & Commercial Joint Stock Bank. The lender, which was established in 1993, has more than 5.4 million customers and 315 branches, the statement shows. The lender reported 2017 total operating income of 16.1 trillion dong and profit before tax of 8.5 trillion dong.

BLOOMBERG