Exclusive-Vietnam's SHB in stake sale talks, could value lender at $2.2 billion - sources

By Yantoultra Ngui, Phuong Nguyen and Khanh Vu

HANOI/SINGAPORE (Reuters) - Vietnam's Saigon–Hanoi Commercial Joint Stock Bank (SHB) is in discussions to bring in a strategic partner that could own up to a 20% stake in the lender, five sources with knowledge of the matter said.

The potential deal could value the Hanoi-based bank at between $2 billion and $2.2 billion, two sources said, adding that financial investors and companies that had approached SHB included those from South Korea and Japan.

SHB, with a market value of $1.7 billion, wants to tie up with a long-term foreign investor and also tap into the growing interest from South Korean and Japanese investors in Vietnam's banking sector, one of the sources said.

In March, Vietnam Prosperity Joint Stock Commercial Bank completed the sale of a 15% stake for $1.5 billion to Japan's Sumitomo Mitsui Financial Group Inc.

SHB is in talks with one financial adviser to explore the discussions to bring in a strategic partner, the two sources said. Deliberations are ongoing and no decisions have been made, they added, declining to be identified as the discussions are private.

According to one of the sources, the deal was expected to be finalised this year or in early 2024, and will require central bank approval.

The privately owned bank counts Vietnamese real estate-to transportation conglomerate T&T Group as its largest shareholder with a 10% stake, according to Refinitiv data.

SHB said in response to Reuters queries: "SHB is actively exploring opportunities with other partners not just Asian ones with the target to bring back best interest for the bank and our shareholders."

Vietnamese banks are boosting their capital bases to build stronger buffers against rising competition and a potentially slowing economy, which has been further weighed down by turmoil in the real estate sector. Larger peer Vietcombank is planning to raise at least $600 million in fresh equity capital, Reuters reported last month.

Established in November 1993 in Can Tho city, SHB, formerly known as Nhon Ai Rural Commercial Joint Stock Bank, employs more than 9,200 staff and operates in nearly 50 provinces and cities in the country, according to its website and latest annual report. It also has operations in Cambodia, Laos and Myanmar.

(Reporting by Yantoultra Ngui in Singapore, Phuong Nguyen and Khanh Vu in Hanoi; Editing by Jacqueline Wong)