At the press meeting to publicise the listing date of Bao Viet Group (BVH), Charles Gregory, HSBC’s chief representative in Vietnam said that Bao Viet is a large sized group and HSBC plans long term investment here without comparing the current offering price of 38,500 dong per share for the first trading session with the average winning price of over 70,000 dong/share drawn from the IPO held two years ago. The cooperation will bring big benefits for domestic insurance companies.

In finance, HSBC to date has had to suffer a big loss after keeping 10 percent of BVH’s chartered capital from 2007 while the state shareholders enjoy benefits. Just from signing the strategic partnership agreement with BVH, the bank eyed a 25 percent holding in the local insurer.

According to the strategic partnership contract, BVH has committed to give priority to sell shares to HSBC in its future capital increase plans. Le Quang Binh, chair of BVH said that his company decided to continue negotiations with HSBC on further increased holding thanks to the foreign bank’s effective support to the insurer. Till now, HSBC has helped BVH in corporate administration and launching insurance products. As a part of the ambitious plan of obtaining up to 25 percent in BVH, HSBC expected to raise its size by 8 percent to 18 percent in the near future with an aim to upgrade the bank’s presence in Vietnam and help itself equalise BHV share price and lower losses when investing the local firm.

The selling price of BVH for HSBC in the next time will be lower than the winning price of IPO two years ago but likely higher than face value whereby BVH will earn a high capital surplus from the global well-known strategic partner.

Meanwhile, Cardif of BNP Paribas Assurance cooperated with Vietcombank and SeABank to set up life insurance joint ventures. On June 11, Vietcombank-Cardif Life Insurance Co Ltd (VCLI) officially was operational with a chartered capital of 600 billion dong, of which Vietcombank contributed 45 percent, BNP Paribas Assurance 43 percent and SeABank 12 percent. The joint venture plans to provide saving and insurance products to Vietnamese market through the distribution networks of both domestic banks.

Nguyen Thi Tam, chair of VCLI said in a statement that her company would bring modern finance products and services to the customers.

VCLI will enjoy the leading insurance and finance advantages of Cardif that operates in 41 countries and has presence in Asia for ten years, and business relation with 35 of 100 the largest banks worldwide, quoting Eric Lombard, chair cum general director of BNP Paribas Assurance Group.

Last year Swiss Re poured some 1.26 trillion dong into Vietnam Reinsurance Joint Stock Co (Vinare) through buying 16,804,610 VNR coded shares at 75,000 dong per share, equalling to 25 percent of Vinare’s chartered capital. The investment brought in a capital surplus of over one trillion dong to Vinare.

Also, both parties signed a strategic cooperation deal aiming to upgrade Vinare’s business capacity and increase the service exchange between two sides.

As for foreign investors, Vietnam is a potential insurance market. Through cooperation with local insurers, foreign investors can shorten time and save cost to enter Vietnamese market while domestic companies can upgrade the financial strength, technology and administration capacity.

Generally, foreign invested companies and joint ventures will be a new motive for the insurance market to develop more professionally and competitively. (DTCK)