Meanwhile, in late July or early August, VPBank is set to receive over $140 million from its arrangement to sell a 15 per cent stake to Japanese partner SMBC. The bank received a deposit equal to $156 million from the Japanes bank in mid-April.

Many other lenders are currently mulling over plans to sell a stake in their businesses to foreign investors, with deals values at billions of US dollars. The most eminent among those involve Vietcombank and BIDV.

Vietcombank is mulling over a private placement of over 307 million shares between 2023-2024 to a foreign financier. Assuming that the purchase price is set at around $4 a share, as was the ticker price at the close of business last week, the state lender would acquire approximately $1.2 billion from any deal.

Similarly, BIDV is seeking to sell a 9 per cent stake equal to over 455 million shares to a foreign partner later this year.

Assuming the per-share value is set at around last week's closing price of $1.80, the bank could collect around $835 million from a foreign investment house.

At the bank’s 2023 AGM in late April, Phan Duc Tu, chairman of BIDV, said that the bank has met a total of 38 investors in the past three years, yet it is still unable to close a deal due to the unfavourable market conditions.

“We are committed to finalising the deal this year, and we are currently speaking to several potential suitors,” said Tu.

In addition, SHB, along with LPBank, is also weighing up private placements to foreign shareholders later this year.

While LPBank has yet to give any updates on its negotiations, SHB chairman Do Quang Hien revealed that the bank is pivoting its strategy away from finding long-term partners to catching the interest of medium-term financial investors. SHB hopes to be able to close a deal later this year or perhaps early next year.

Pham Thien Quang, managing director at the Wealth Management Department at VNDirect Securities, regards the raising of capital from foreign institutions as becoming increasingly important to domestic banks.

SMBC’s acquisition of a 15 per cent stake in VPBank at $1.5 billion is testament to how the Vietnamese banking sector is maintaining its appeal to major foreign players.

Besides selling stakes in the banks themselves, many local commercial lenders are being proactive in seeking foreign funding. Techcombank currently leads the way in this regard, with VietinBank, MB, VIB, and HDBank following suit.

Successfully securing foreign funding creates many advantages for banks. Do Quang Vinh, SHB deputy chairman said,"This transaction will generate a significant surplus for SHB shareholders, help the bank consolidate its capital buffer and strengthen financial resources."

Similarly, VPBank revealed that with the nearly $1.5 billion from its deal, the bank can now meet the increasingly diverse requirements from its retail and corporate customers, including Foreign Invested Enterprises, and more easily meet its ambitious growth targets.