Australia's CBA buying 15 pct stake in Vietnam bank VIB

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.

"With a young population of 87 million, a rapid uptake of Internet and mobile phone technologies and only around 15 percent of the population currently using banking services, we expect the demand for financial services in Vietnam to increase significantly in the coming years," he said in the statement.

The State Bank of Vietnam, or central bank, is aiming for credit growth this year of 25 percent to control inflation, after lending accelerated 37.73 percent in 2009 from 23.6 percent the previous year.

Vietnam caps foreign ownership in a domestic bank at 30 percent with a 15 percent limit for a strategic investor.

A foreign strategic investor could own 20 percent subject to government approval.

So far Vietnam has allowed only two banks to have the maximum holding -- HSBC Holdings Plc has 20 percent stake in Techcombank and Malayan Banking Bhd has a similar ownership in An Binh Bank.