Under the terms of the deal, the investment bank also has the right to purchase a further eight per cent stake in the country's leading insurer after 18 months.
It is thought that the deal reflects HSBC executivesâ aim of doubling the proportion of its profits which are derived from insurance operations to 20 per cent.
The acquisition follows HSBC's investment in Vietnamese lender Techcombank, in which it now holds a 15 per cent stake, as the bank adopts a strategy of investing in both banking and insurance sectors in developing countries - which it perceives will grow rapidly as consumer wealth increases.
However, the deal for Bao Viet has been criticised by activist investor Eric Knight, who argues that the size of the stake diminishes the influence HSBC will able to exert over the insurance firm's strategy.
He said: "It is another example of the failed strategy that HSBC has pursued over 15 years of building a portfolio of stand-alone businesses which cannot be integrated into a coherent whole."