Agriculture Promotion Bank not ready to become public company

Agriculture Promotion Bank not ready to become public company

The Agriculture Promotion Bank will not be ready to become a public company this year despite government efforts to encourage state enterprises to list on the Lao Securities Exchange, a top bank official said yesterday.

Headquarter of Agriculture Promotion Bank

“To list on the stock market requires a long term development strategy,” Mr Buangeun Phongsavat told Vientiane Times , adding that it is too early to talk about the issue.

He made the comment yesterday after the National Committee for Business Improvement announced it would push state enterprises to become public companies and list on the stock market, enabling them to raise funds to expand their businesses.

Among state enterprises, the Agriculture Promotion Bank, Lao Airlines and Vientiane Water Supply Enterprise have the potential to become public enterprises and list on the Lao Securities Exchange, which began trading last month.

Currently only two public companies, BCEL and EDL-Generation, are listed on the stock market, meaning the trade atmosphere remains quiet. More public enterprises are expected to list on the market this year.

The government has invested a large amount of funding to build the stock market facilities, aiming to create opportunities for state and private companies to mobilise investment funds from the public as is done in many other countries.

A major problem that state enterprises face when attempting to list on the securities market is demonstrating transparent operations.

Mr Buangeun said that although the bank has no concrete plans to become a public company itself, it has signed an MOU with a Chinese company to establish a securities company, aiming to provide financial consultation and underwriting services for companies hoping to list.

“We are in the process of establishing the joint venture,” he said, adding that details on the joint venture will be clearer at the end of this year.

According to an annual report from the bank, in 2010 the bank generated revenue of more 300 billion kip while its expenditure was about 262 billion kip. The bank made a net profit of about 39 billion kip in the same year, while it plans to make a net profit of about 45 billion kip this year.

The bank's credit growth reached 1,661 billion kip in 2010 and is expected to reach 2,014 billion kip this year. Non-performing loans amounted to 3.27 percent of the total.

The bank said that as the price of food in Laos continues to increase, it will attempt to provide more loans to farmers so they can boost their production capacity.

vientiane times