A Military Bank branch in Hanoi. (Photo: VNA)Hanoi (VNS/VNA) -Billions of banking stocks are about to flood the market withbanks planning to pay stock dividends and issue new sharesto raise their charter capital.
The Hanoi Stock Exchange (HNX)has approved the additional listing of more than 498.8 million sharesin Asia Commercial bank (ACB), which will be issued to pay dividends toits shareholders next month. Once completed, the bank’s charter capital willincrease to nearly 21.62 trillion VND (932 million USD) from 16.63 trillion VND.
Despite being the largestlisted bank on the HNX, the HCM City-based lender is planning to shift tothe Ho Chi Minh Stock Exchange (HoSE) in the last two months of this year. Thebank's share value is expected to rise after the move as it will beeligible to be added to the sub-indices on HoSE such as the VN30,VNDiamond, VNFinSelect and VNFinLead.
Military Bank (HoSE: MBB) hasalso sent confirmation to the State Securities Commission (SSC) of itsplan to pay dividends in shares. This bank is planning to pay a 15 percentdividend in the form of stocks and 25.6 million of its treasury shares.
After the issuance, expected inthe fourth quarter of this year or the first quarter of 2021, more than 385million MBB shares will be traded on the stock market.
HDBank also announced thatOctober 2 will be the deadline for existing shareholders to register to receivetheir dividends and bonus shares for 2019. The bank will issue nearly 290million shares to pay dividends and distribute bonus shares at a rate of 30 percent.
Once completed, HDBank'soutstanding shares will increase to nearly 1.3 billion shares.
Banks issuing shares to paydividends also include Sai Gon-Hanoi Bank (HNX:SHB), Bac A Bank (BAB) andLienVietPostBank (LPB), with the latter two trading on the Unlisted PublicCompany Market (UPCoM). These lenders are planning to pay dividends in the formof stocks at a rate of 9-20 percent.
Meanwhile, state-owned bankssuch as Vietcombank (HOSE:VCB) plans to pay 2018 dividends at a rate of 18percent, equivalent to 676.6 million shares, in the third or fourth quarter.BIDV (HOSE:BID) and Vietinbank (HOSE:CTG) also want to issue shares to paydividends, along with bonus shares.
The State Bank of Vietnam hasdirected banks not to pay cash dividends this year to reserve resources to dealwith the effects of the COVID-19 pandemic, focusing on lowering interest ratesto support businesses.
Raising capital throughdividends or issuing additional shares is also necessary for the banks toimprove their financial capacity given that bad debts are expected toincrease post-pandemic.
New listings
Vietnam Maritime Bank (MSB) isapplying to list on HoSE. If approved, the market will welcome 1.17 billionshares. MSB is currently trading on the Over-The-Counter (OTC) market.
Vietnam International Bank(UPCoM:VIB) has also sent listing documents to HoSE. Investors expect the bankcould trade 924.5 million shares in the last quarter of this year.
Banking stocks have been onthe radar of investors in recent times. Many shares have gained 10-40 percentsince August, such as VIB (44 percent), LPB (37 percent), SHB (29 percent) andMBB (23.5 percent).
According to BIDV Securities(BSC), switching stock markets will likely help re-evaluate the value ofbanks such as ACB, VIB and LienVietPostBank due to more transparency ininformation. This will also help the banks to approach more investors,facilitating their plans to raise capital.
Meanwhile, SSI Researchexpected better profit prospects next year would support prices of bankingshares.
State-owned banks' 2021 profitswere forecast to increase by 23 percent, while joint-stock commercialbanks would increase by 11.2 percent, according to the report./.
VNA
