Press Release

IFC, LeapFrog Investments and DEG Invest in Vietnam’s HDBank to Help Accelerate Economic Recovery

  • Leapfrog Investments joins IFC and DEG in $165m bond issue for leading Vietnamese retail and SME bank
  • HDBank aims to expand its retail and SME portfolio, reaching more rural populations and informal household businesses as well as women entrepreneurs.
  • LeapFrog will work closely with HDBank to leverage our customer experience accelerator program to improve the bank’s digital tools

Ho Chi Minh City, Vietnam: As Vietnam accelerates economic recovery amid COVID-19, IFC, LeapFrog Investments, and Deutsche Investitions- und Entwicklungsgesellschaft (DEG) have invested $165 million in convertible Tier 2 bonds issued by Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank), a leading Vietnamese private retail and SME bank. While strengthening the bank’s capital base, the funding will help increase lending to retail and small and medium enterprises (SMEs), including women-owned or -led ones.

While Vietnam’s SMEs account for about 98 percent of all businesses, generate 40 percent of gross domestic product and 50 percent of employment, they have limited access to finance, hindering their growth. Further, given the economic challenges of a global pandemic over the past two years, smaller businesses in Vietnam need more working capital urgently to sustain operations and recover from COVID-19.

In this context, HDBank aims to expand its retail and SME portfolio, reaching more rural populations and informal household businesses as well as women entrepreneurs. In response, IFC and its Asset Management Company (AMC), LeapFrog Investments, and DEG—the German Development Finance Institution have subscribed $95 million, $60 million, and $10 million respectively to the US dollar-denominated five-year-plus-one-day convertible Tier 2 bonds. The investors will have the option to convert the bonds into common shares of HDBank over the mutually agreed time period.

“The funds give us greater ability to offer thousands of additional loans to retail, rural, and smaller businesses, including women entrepreneurs, who need finance to sustain through the COVID-19 crisis and beyond,” said Pham Quoc Thanh, HDBank Chief Executive Officer. “The investments will help HDBank improve its capital position after having met the Basel II capital safety and risk management standards required by the State Bank of Vietnam, and at the same time realize its own growth strategy to become a leading SME and rural bank in the local market.”

Over the last few years, HDBank has been focusing on expanding lending to SMEs, especially those in rural areas—this segment currently accounts for about half of the bank’s portfolio. With one of the largest rural networks among Vietnamese banks, it aims to significantly grow the number of its rural customers—mainly small-scale agri-based and informal businesses.

The bond raise will also help HDBank enhance its environmental and social (E&S) risk management capacity by introducing IFC Performance Standards while improving the bank’s corporate governance policies in line with international best practices, including a commitment to not fund coal-related projects.

“Our investment not only enables HDBank to strengthen its capital base to seize growth opportunities and further expand its core business of lending to SMEs but also sends a positive signal to boost international investor confidence in the resilience of Vietnam’s financial sector and the country’s continued growth prospects, despite the impacts of an ongoing global pandemic,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia, and Lao PDR.

“LeapFrog is proud to support HDBank in their mission to reach emerging consumers and entrepreneurs across Vietnam and provide them with the financial resources to thrive,” said Fernanda Lima, LeapFrog Investments Partner. “Our team at LeapFrog Investments will work closely with HDBank to leverage our customer experience accelerator program to improve the bank’s digital tools, including banking apps, rewards programs and cash transfers which are fundamental to expanding access to fair and reasonable credit products for Vietnam’s emerging consumers.”

“DEG already entered into a strong cooperation with HDBank with its first investment in 2020. DEG is leveraging its German and European business network by setting up a German Desk at HDBank and is committing its business support services in the areas of environmental and social governance as well as digitalization. We are proud to be part of the bank’s successful development and look forward to accompanying and supporting HDBank further,” said Jochen Steinbuch, DEG’s Regional Manager for Greater Mekong.

Ho Chi Minh City Development JSC Bank (HDBank), established in 1989 as a privately-owned commercial bank headquartered in Ho Chi Minh City, Vietnam, currently holds a market share of 2% in terms of assets and deposits among Vietnamese banks. As of 30 September 2021, the Bank reported total consolidated assets of VND346 trillion ($15.1 billion), conducting its operations in Vietnam through its 308 branches and around 18,025 point-of sale terminals nationwide. Since 2018, the bank’s shares have been listed on the Ho Chi Minh City Stock Exchange (ticker: HDB) with the Vietnamese leading conglomerates Sovico Holdings being its largest shareholder representing 14.48% of its total share capital. HDBank has recently been supporting Vietnam’s sustainability goals by pioneering as one of the country’s largest green financiers.

LeapFrog invests in exceptional businesses in Africa and Asia, partnering with their leaders to achieve leaps of growth, profitability and impact. Founded in 2007, LeapFrog’s companies now reach 261 million people across 35 countries with healthcare or financial services. LeapFrog investee companies have also grown on average at 26 per cent annually from the time of investment. They now provide jobs and livelihoods to 130,000 people. Inspired by LeapFrog’s strategy of Profit with Purpose, LeapFrog has raised over US $2bn from global institutional investors, including $500m recently committed by Temasek to LeapFrog and future funds. LeapFrog was ranked by Fortune as one of the top five Companies to Change the World, alongside Apple and Novartis, the first private investment firm ever listed. For more information on LeapFrog, please visit

IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit

For almost 60 years DEG, the German Development Finance Institution, has been a reliable partner to private-sector enterprises operating in developing and emerging-market countries. We provide our customers with tailor-made solutions, including financing, promotional programs and advice tailored to individual needs. They can thus develop successfully and sustainably, while generating local added value and creating qualified jobs. With our portfolio of around EUR 8.5 billion in approximately 80 countries we’re one of the world’s largest private-sector development financiers. Learn more at