KUALA LUMPUR (Feb 19): Public Bank Bhd, via its subsidiary Public Bank Vietnam Ltd (PBVN), is buying RHB Securities Vietnam Company Ltd (RHBSVN) from RHB Investment Bank Bhd (RHBIB) for 374 billion dong or RM72.55 million, cash.
The disposal will see RHB Bank Bhd's investment banking arm exiting Vietnam's stockbroking and securities market.
Public Bank managing director Tan Sri Dr Tay Ah Lek said in a statement that the proposed acquisition presents a good opportunity for Public Bank to expand its financial services offerings in Vietnam to include securities trading and to participate in the immense growth potential of the country's capital market.
“Public Bank first ventured into Vietnam in 1992 by setting up PBVN as a joint venture bank and subsequently obtained a 100% foreign-owned bank licence from the State Bank of Vietnam in 2016.
“PBVN has been operating profitably since its incorporation and business has since expanded significantly. It currently has 40 branches located strategically throughout Vietnam and this strategic acquisition will allow the company to leverage its existing clientele in Vietnam to grow the securities trading business,” he said in the statement.
The group also expects the acquisition to provide synergy to its Indo-China operations, given that the group has an existing securities trading arm in Cambodia, namely Campu Securities plc, its bourse filing on Monday noted.
PBVN inked the sale and purchase agreement with RHBIB for the acquisition on Monday.
Previously known as Vietnam Securities Corp and incorporated in 2006, RHBSVN assumed its present name after RHBIB became its sole owner in 2019. It is primarily involved in the provision of securities brokerage services, securities investment consultancy services, securities custodian services and proprietary securities trading.
In a separate statement, RHBIB said the divestment is a strategic decision.
“The decision by RHB Investment Bank to divest its equity interest in RHB Securities Vietnam to Public Bank Vietnam Ltd aligns with the group’s long-term strategic business direction of focusing our resources and efforts on bolstering RHB Investment Bank’s operations in other markets where we are more established and have a stronger presence, further reinforcing our unwavering commitment to sustainable growth and service excellence.
"We remain committed to ensuring a smooth transition process and will ensure that we continue to deliver service excellence to our clients throughout the transition period,” said RHB Banking Group group MD cum group chief executive officer Mohd Rashid Mohamad.
RHB Bank expects a net gain of RM29.15 million from the disposal of RHBSVN, which it said does not have significant market presence in Vietnam as its current operations there lack the scale to compete competitively.
RHBSVN's financial performance has also been deteriorating since FY2019, RHB Bank noted in its bourse filing. For FY2022, RHBSVN recorded a loss after taxation of 7.55 billion dong, mainly due to increasing operational cost and the intense competition of Vietnam's stockbroking industry.
The transaction is expected to be completed by the end of the second quarter of 2024.
Public Bank's shares closed two sen or 0.45% higher at RM4.43 on Monday, valuing the group at RM85.99 billion. RHB Bank closed one sen or 0.18% higher at RM5.63, for a market capitalisation of RM24.13 billion.