“Techcombank Weighs Sale of 15% Stake to New Strategic Investor if Foreign Owners Exit”

In a recent international press interview, Techcombank’s CEO, Mr. Jens Lottner, revealed that the bank is considering selling 10-15% of its shares to a suitable long-term strategic investor.

“15% is probably the number we could actually put out there,” said Mr. Lottner, adding that the bank is seeking a partner with capabilities, especially in technology.

At the same time, an existing investor holding 8-9% of the bank’s capital is also prepared to exit, hence the rationale for a 15% stake sale at this juncture.

Foreign investors currently hold approximately 22% of Techcombank’s shares, still below the 30% foreign ownership cap for banks.

As a result, there will be shareholders selling their shares before Techcombank can offer a 15% stake.

According to Mr. Lottner, Techcombank is looking for companies that can help the bank “participate in the trade corridors, as there is a lot of money flowing in from Singapore, Japan, and South Korea.”

As one of the leading digital banks, Techcombank recorded a record 850.5 million transactions by individual customers through electronic banking channels in Q3/2024, an increase of 8.9% from the previous quarter and a 47.2% surge compared to the same period last year.

On a cumulative basis for the first nine months of this year, the volume and value of transactions by individual customers through digital channels reached 2.3 billion transactions and VND 8.2 quadrillion, respectively, representing growth of 53.5% and 20.3% year-over-year.

The addition of a strategic partner with strong capital and technological capabilities will further boost growth in digital transformation, continuing the market share gains at the bank.

Moreover, Techcombank is also approaching a new insurance partner after ending its cooperation with Manulife Vietnam. Mr. Lottner stated that more details about this would emerge in the next six months.

It is understood that the early termination of an eight-year contract with a 15-year term with Manulife resulted in Techcombank paying VND 1,800 billion in compensation to its partner.

Currently, Techcombank is considering various scenarios, including focusing on distribution or establishing an insurance company and working with other partners.

Concurrently, Techcombank has decided to launch a separate insurance unit, Techcom Non-life Insurance JSC (TechcomIns), becoming the 31st insurance enterprise in Vietnam. The company has a charter capital of VND 500 billion, of which Techcombank contributes 11%, equivalent to VND 55 billion.

“We very much want to be more involved in the insurance product manufacturing process, rather than just being a distribution agent,” shared Mr. Lottner.

Despite not directly venturing into the life insurance sector, by establishing its own insurance company, Techcombank demonstrates its intention to gradually complete its financial ecosystem.

Techcombank is currently Vietnam’s largest listed private bank, backed by the Warburg Pincus investment fund. TCB shares have risen over 40% this year, far outpacing the VN Index’s gain of just over 6%.

In terms of business performance, Techcombank reported a pre-tax profit of VND 22,800 billion in the first nine months of this year, a 33.5% increase compared to the same period last year.

As of September 30, the bank had 14.8 million customers, an increase of nearly 500,000 new customers in the third quarter. Techcombank’s total assets exceeded VND 927,000 billion, a 9% rise from the beginning of the year.

The bank aims for a pre-tax profit of VND 27,100 billion in 2024, an 18% increase from the previous year. Mr. Lottner stated that Vietnam’s booming economy would provide the bank with “multiple runways for the next few years, possibly even the next decade.”