L. Joseph
Phone:  (202) 473-7700
Fax:  (202) 974-4384
E-mail:  ljoseph@ifc.org


Ho Chi Minh City, Vietnam, October 24, 2002—the International Finance Corporation (IFC), the private sector development arm of the World Bank Group, today signed a Subscription Agreement to make an equity investment of up to US$3 million for a 10 percent stake in Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank).  This transaction represents IFC’s first investment in a Vietnamese bank and demonstrates IFC’s intention to promote banking development in Vietnam.

Mr. Karl Voltaire, Director of IFC’s Global Financial Markets Department who is on an official visit to Vietnam, said, “This investment will help strengthen Sacombank’s capital base and institutional capacity, and assist the bank in its ongoing effort to achieve international operating and governance standards.  Improving standards in the banking sector is a key step toward strengthening the country’s financial infrastructure.”

Sacombank Chairman Mr. Dang Van Thanh said, “IFC’s equity participation will help further improve our professional skills and accelerate the introduction of international banking best practices.”  He added, “We believe our cooperation with IFC will be successful.”

Established in 1992 through a merger of four credit cooperatives, Sacombank has grown rapidly to become the second largest of the joint-stock banks in Vietnam today.  Headquartered in Ho Chi Minh City operating in other major cities and provinces in the country, Sacombank offers comprehensive commercial banking services primarily to SMEs and individuals.  As of August 31, 2002, Sacombank had total assets of $242 million and shareholders’ equity of $19 million.

Sacombank has a diversified shareholding structure, with Refrigeration Electrical Engineering Corporation (a Vietnamese listed company) and Dragon Financial Holdings (whose parent, Dragon Capital Group, runs the Dublin-listed Vietnam Enterprise Investment Limited Fund) each holding 10 percent.  The remaining 80 percent is held by some 6,000 individual shareholders (including many employees of Sacombank), of which the largest shareholding is 5 percent.  

IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives.  IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.  Since its founding in 1956, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries.  IFC’s committed portfolio at the end of FY02 was $15.1 billion, with an additional $6.5 billion held for participants in loan syndications.