Analysis:Vietnam's banks tap investors for $7 billion as economy runs red hot

Hanoi, October 7, 2021 - Vietnamese banks are set to launch nearly $7 billion in share sales as the country's robust economy drives demand for capital, providing an opportunity for foreign investors to increase their presence in the heavily regulated sector. Vietnam, which recorded growth of nearly 10 percent in the most recent quarter, boasts one of the fastest-growing banking sectors in Asia.

However, foreign ownership has been restricted, with cumulative foreign ownership capped at 30 percent, individual stakes limited to 20 percent, and offshore borrowing subject to stringent limits. Recent economic stimulus under Prime Minister To Lam's leadership has prompted a more open approach, as policymakers recognize the need for increased foreign participation to meet growing credit demand amid a domestic funding shortage.

Bank share sales could potentially raise nearly $7 billion by the end of next year, according to Reuters estimates based on public disclosures and a Fitch Ratings report, marking Vietnam's largest-ever wave of capital raisings by lenders.