HSBC, the world's third-largest banking group, said its Asia unit, Hong Kong and Shanghai Banking Corp, has agreed to buy a 10 per cent share of Vietnam Technological and Commercial Joint Stock Bank (Techcombank) for US$17.3 million.
The bank said it had received regulatory approval and it expected the transaction to be completed shortly.
Alain Cany, chief executive of HSBC in Vietnam, said: 'We are optimistic about the prospects for Vietnam which has benefited from continued, strong economic growth over the past few years and measures taken by the government to expand the local banking industry.
'Our investment in Techcombank will give HSBC greater participation in Vietnam's fast-developing financial market and we hope, in return, to offer our international expertise to support the growth of Vietnam's economy,' he added.
Techcombank is Vietnam's third-largest joint stock bank, with assets of US$482 million at the end of last year. The bank, with its headquarters in Hanoi, has 45 branches and about 1,000 staff across the country. It offers a range of retail and commercial banking services. HSBC, with investment capital of US$30 million, has two branches and 190 employees in Vietnam.
Foreign banks are betting the country's US$45 billion economy will continue to grow, after expanding 7.7 per cent last year, its fastest pace since 1997.