10:17 | 29/08/2016 Finance - Banking
(VEN) - IFC’s recent quasi equity investment in TienPhong Commercial Joint Stock Bank (TPBank) helps the institution expand its loan services to better serve growing Vietnamese businesses.
As a member of the World Bank Group, IFC supports greater access to finance for the private sector by boosting lending capacity and strengthening operations of local banks in developing economies.
This quasi equity investment of up to VND 403.1 billion (about $18.35 million equivalent) in pidend preference shares once converted, would allow IFC to become a shareholder in TPBank, owning at that time 4.999 percent of the bank's equity capital. Through this investment TPBank has the ability to offer loans to more than 40,000 small and medium enterprises in Vietnam representing a loan portfolio growth of more than $2 billion equivalent over the next five years.
IFC is also providing advisory services to further improve the lender’s risk management, digital and Small and Medium Enterprises (SME) banking products, as well as corporate governance standards.
“We are excited to have IFC join us as a pidend preferred shareholder, marking a long-term strategic cooperation going forward,” said Do Minh Phu, TPBank’s Chairman. “IFC’s abundant financing and extensive relationship network will enhance our capital resources and governance capacity as well as uncovering opportunities of cooperation with local and international financial institutions.
IFC’s investment supports TPBank’s long-range plan of becoming the country’s leading digital bank, expanding its retail and SME reach, which comprise about 85 percent of TPBank’s portfolio.
“The investment in TPBank demonstrates IFC’s continued support to Vietnam’s banking sector and its development of persified financial products and services to small and medium enterprises, which will in turn increase financial inclusion and employment and reduce poverty,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Vietnam.
Founded in 2008, TPBank has grown into a medium-sized bank with total assets of $3.7 billion as of mid 2016. TPBank joined IFC’s Global Trade Finance Program in December 2015 with an initial trade line of $10 million. IFC has recently increased its trade exposure to $30 million, based on active utilization of the lender. To date, IFC has supported $40 million worth of trade transactions processed by TPBank for Vietnamese importers and exporters.