BIDV, formally known as the Commercial Bank for Investment and Development of Vietnam, issued 603.3 million shares with a total value of nearly VND20.3 trillion ($875 million), in a private placement to KEB Hana Bank, the Vietnamese bank announced Monday.

The $875 million deal is the biggest M&A transaction in Vietnam's banking industry so far. It has raised BIDV’s charter capital from VND34.19 trillion ($1.47 billion) to VND40.22 trillion ($1.74 billion), the highest registered charter capital of any bank in the industry.

KEB Hana will hold onto this stake for at least five years, while providing BIDV with long-term support in areas such as strategic management banking development, tech systems, portfolio management, retail lending and human resources, according to the share sale agreement.

"This strategic investment in BIDV will not only bring about operational efficiency in the bank but also boost its other activities such as cards, securities, capital, insurance, and in particular fintech," said Ji Sung Kyu, CEO of KEB Hana Bank.

This partnership will also help BIDV upgrade its management model and executive capacity, as well develop more modern products and services and use advanced technology to meet the needs of customers, said Phan Duc Tu, BIDV chairman.

Vietnam caps foreign ownership in local banks at 30 percent, but has allowed some overseas banks to open wholly-owned units.

At a meeting in Seoul in June, Deputy PM Vuong Dinh Hue said that Vietnamese government would not be licensing new banks until the end of 2020 since it is focused on restructuring the banking and financial system.

However, foreign investors could consider buying under-performing banks that are being restructured, such as Ocean Bank, Vietnam Construction Bank, and Global Petro Commercial Bank (GPBank), he said.