The Commonwealth Bank of Australia is taking a 15 per cent interest in Vietnam International Bank for an undisclosed sum.

In a joint statement, the banks agreed that CBA would eventually increase its stake to 20 per cent by the end of 2011. According to the law, foreign firms can own as much as 30 per cent of a domestic bank, with a 15 per cent cap for strategic investors.

CBA head of international financial services Simon Blair said that the financial services market is expected to grow in Vietnam over the next years, given the country's demographics and low bank penetration.

"With a young population of 87 million, a rapid uptake of Internet and mobile phone technologies and only around 15 per cent of the population currently using banking services, we expect the demand for financial services in Vietnam to increase significantly in the coming years," said Blair.