Singapore’s sovereign wealth fund GIC has agreed to acquire a 7.73% stake of Vietnamese lender Vietcombank.

GIC will buy 305,810,895 new shares in Vietcombank as part of the deal, boosting Vietcombank’s charter capital and helping it prepare for BASEL II implementation.

In addition, the sovereign wealth fund will provide technical assistance and support to Vietcombank.

The investment represents GIC’s first significant direct investment in Vietnamese commercial bank.

GIC head of direct investments group for Southeast Asia, private equity & infrastructure Amit Kunal said: “This investment reflects our confidence in Vietnam’s long-term growth potential. We believe with Vietcombank’s strong management team and market positioning, the bank will be able to capitalise on the strong growth trajectory of the Vietnam banking industry.”

The deal is anticipated to close by the fourth quarter of 2016, subject to regulatory approvals.

Vietcombank board of directors chairman Nghiem Xuan Thanh said: “Should this agreement be approved by the Governor of the State Bank of Vietnam and the Prime Minister of Vietnam, it would represent an important milestone for the long-term co-operation between GIC and Vietcombank.

“GIC’s strong reputation and experience will provide Vietcombank the support it needs to achieve its financial and business goals, both locally and internationally. In return, our market leadership and strong growth prospects offer GIC potential upside in its investment in Vietcombank.”