350 million shares of Vietcombank will be issued by way of public auction or private placement.(Source: Vietcombank)Hanoi (VNA) – The Commercial Bank for Foreign Trade of Vietnam(Vietcombank) is planning to sell more than 350 million shares, or a 10 percentstake, to foreign investors in the first half of 2018.
The bank’s decision comes after a green signal from theGovernment, Nikkei reports.
Vietcombank Chairman NghiemXuanThanh told reporters that the plan for theprivate equity placement had been approved by the relevant authorities. Theshares will be issued by way of public auction or private placement to alimited number of foreign investors.
He said Singapore sovereign fund GIC was among the potential buyers. Japan’sMizuho Bank, the biggest foreign investor in Vietcombank with a 15 percentstake, will be allowed to buy additional shares to maintain its ownership ratioat the bank.
In Vietnam, foreign ownership in state banks is capped at 30 percent.
Vietcombank is among a small number of banks that have a 9.12 percent stakereserved for foreign investors, according to Linh Nguyen from Saigon SecuritiesResearch.
To raise capital by issuing shares, Vietcombank originally expected to completethe transfer of a 7.7 percent stake to GIC in 2016. However, the deal was notapproved due to disagreements on the share price. The Government wanted to sellthe issuance based on market prices but not lower than the valuation price.
Vietcombank shares closed at 71,400 VND (3.14 USD) on February 23, havingdoubled in value since the end of 2016.
Pham ThiTo Tam, an analyst at KIS Vietnam, a subsidiary of Korea Investment& Securities Co., said Vietcombank’s asset quality remained healthy, havingreduced its 2017 non-performing loans ratio to 1.13 percent, the lowest in thesector, and with loan-loss coverage at 130 percent, the highest among itspeers.
Vietcombank has sold its shares to other local financial institutions to reduceits risk of cross-ownership. The bank also plans to divest its investment inVietnam Airlines this year, from which it expects to make good profit.
Meanwhile, the lender is making a big push to promote retail and individuallending, which accounted for 32.7 percent of the total lending in 2017, up from25.3 percent in 2016.-VNA
VNA
