Vietcombank divestment from Saigonbank and CFC greenlighted
Vietcombank divestment from Saigonbank and CFC greenlighted
The State Securities Commission of Vietnam (SSC) has licensed Vietcombank to sell its shares at Saigon Bank for Industry and Trade (Saigonbank) and Cement Finance Company (CFC) in order to comply with central bank regulations.
The bank will auction 13.2 million shares (4.3 per cent stake) in Saigonbank at the initial price of VND12,550 ($0.55) and 6.6 million shares (10.91 per cent stake) in CFC at the initial price of VND11,549 ($0.51).
The bank’s spokesperson announced that the auctions will be held in November.
With these initial prices, the bank is forecast to collect VND165.66 billion ($7.29 million) from Saigonbank and VND76.22 billion ($3.35 million) from CFC.
Up to December 31, 2016, these two investments amounted to VND123.45 billion ($5.43 million) and VND70.95 billion ($3.12 million).The divestment scheme was part of the bank’s proposals at the annual general shareholders' meeting (AGM) in April 2017.
In the AGM, Nghiem Xuan Thanh, Vietcombank’s chairman of the board of directors, asserted that the low bidding price hindered the bank to carry out the disinvestment scheme at Saigonbank, CFC, and Oriental Commercial Joint Stock Bank (OCB).
Thanh also added that the bank is still in possession of stakes in five other credit institutions, in three of which Vietcombank’s stakes exceed the stipulated holding amount of 5 per cent.
Another issue brought up at the AGM was that a financial institution is not allowed to possess stakes in more than two credit institutions, which is the reason behind the divestment in Saigonbank and CFC.
As a follow-up of the disinvestment in Saigonbank and CFC, Vietcombank handed over a proposal to divest from Eximbank.
If successful, the proceeds from the divestment could reach VND700 billion ($30.814 million).
According to the latest financial report of Saigonbank, the bank witnessed a remarkable growth in financial performance in recent years.
In the first two quarters in 2017, the bank’s net profit reached VND128 billion ($5.63 million), and its chartered capital of VND3.080 trillion ($135.58 million).
CFC has a total chartered capital of VND650 billion ($28.613 million), with Vietnam Cement Industrial Corporation (VICEM) being the largest stakeholder (39 per cent). In the first two quarters of 2017 the bank earned an accumulated net profit of VND5 billion.
At the moment, Vietcombank holds 8.19 per cent of the stakes in Eximbank, 7.16 per cent in MBB, and 5.07 per cent in OCB.
