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Vietnam's No. 2 lender BIDV in talks to raise at least $200 mln in stake sale - sources

By Yantoultra Ngui and Phuong Nguyen

SINGAPORE/HANOI, Aug 2 (Reuters) - Vietnam's second biggest listed lender, Bank for Investment and Development of Vietnam or BIDV, is in talks with potential investors to raise at least $200 million from a stake sale, three sources familiar with the matter said.

The fundraising follows similar moves by larger state-owned bank Vietcombank and smaller privately owned lenders Vietnam Prosperity Joint Stock Commercial Bank and Saigon Hanoi Bank.

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.

BIDV, which is 80.99%-owned by Vietnam's central bank, obtained shareholders' approval in 2022 to sell a stake of 9% by issuing new shares.

The $200 million is the minimum it is looking to raise currently as part of the broader fundraising plan, the sources said, in the first public indication of the size of an initial sale.

The sources said BIDV is open to either one buyer who would take the full 9% stake or to different buyers for smaller stakes until the 9% ceiling is reached.

BIDV is working with financial advisers on the plan, three sources said. All sources declined to be identified as the matter is private.

The Hanoi-based lender, which has a market value of $10.3 billion, is in talks with both local and foreign investors, including from North Asia, one of the sources said.

BIDV confirmed its plan to raise capital via a 9% stake sale, in response to Reuters' query. The lender said it is still looking for investors and the size of the deal has not been finalised.

Besides bolstering its capital base, funds will be used to upgrade the bank's facilities and technology, the source added.

Another source said BIDV is in discussions with one local investor on a stake worth about $120 million.

Pricing is a factor that both sides are negotiating as BIDV's share price has risen around 27% since the start of this year, the source added.

The final decision on the selection of investors is subject to State Bank of Vietnam's approval, the three sources said.

Founded in 1957 as the Bank for Construction of Vietnam, BIDV has grown to 1,085 branches and transaction offices locally and overseas, according to its latest 2022 annual report.

In 2019, BIDV sold a 15% stake to South Korea's KEB Hana Bank for 20.3 trillion dong ($855.82 million).

This March, private lender Vietnam Prosperity Joint Stock Commercial Bank (VPBank) sold a $1.5 billion stake to Japan's Sumitomo Mitsui Financial Group Inc ($1 = 23,720 dong) (Reporting by Yantoultra Ngui in Singapore and Phuong Nguyen in Hanoi; editing by Kane Wu and Kim Coghill)