Sumitomo Mitsui Banking Corp (SMBC) is in advanced negotiations to increase its stake in Vietnam’s VPBank to approximately 20% from 15%, according to four people familiar with the discussions. The Japanese lender bought its existing holding in 2023 for $1.5 billion. The parties aim to complete the transaction this year, although they remain divided over valuation after months of talks. VPBank is seeking a substantial premium, comparable to the roughly 40% premium SMBC paid in 2023, while SMBC has considered buying shares on the open market instead of through a private placement (direct sale of newly issued shares). A 5% holding is currently valued at about $425 million, while an advisory report said VPBank could raise $700 million to $900 million through a newly issued stake. A larger investment would expand SMBC’s access to Vietnamese consumers and companies, including insurance and credit customers, while supporting services for Japanese clients and multinational manufacturers. Vietnam is targeting annual growth of at least 10% through 2030, and its stock market was upgraded to emerging-market status by FTSE Russell this week. SMBC and VPBank declined to comment. Foreign ownership in Vietnamese banks is generally capped at 30%, although VPBank has a 49% ceiling after taking part in the restructuring of GPBank.