Many banks unlikely to join stock market this year
Many banks unlikely to join stock market this year
The central bank’s governor Nguyen Van Binh has many times urged banks to list on the local stock exchange but many banks may find it impossible to do it this year.
In Document 657/NHNN-TTGSNH on the listing of commercial banks on the stock market, Binh called on the local branches of the central bank to continue pushing commercial banks to finish their preparations for bourse listings as required in the banking sector restructuring plan in 2011-2015.
Currently, there are nine banks listed on the bourse – Vietcombank, VietinBank, BIDV, ACB, Eximbank, Sacombank, MBB, SHB and Navibank. Their total market capitalization is around VND134 trillion (around US$6.29 billion).
If the remaining 26 banks list on the stock market, their total market capitalization would rise to around VND150 trillion.
Since early last year, the Prime Minister told the central bank to instruct commercial banks to get listed as measures to ensure transparency and prevent cross-ownership at banks. But most banks have not been able to realize this as they have been too busy settling bad debts and drawing up growth strategies in the past years.
Speaking to reporters earlier this year, Nguyen Dinh Tung, general director of Orient Commercial Bank (OCB), said the bank has mapped out a listing plan and would try to translate it into reality. However, when OCB will have its shares traded on the local stock market depends on the bank’s leaders and shareholders.
Only NamABank has made a move to present its listing plan to shareholders for approval.
Three enterprises have registered to join the Hochiminh Stock Exchange but none of them are banks.
A leader at the central bank said only qualified banks should list while financially incapable ones will continue to be restructured.
“The banking system may undergo a lot of changes this year, so the listing of banks may start next year,” he said.
He added the central bank would require banks struggling with negative equity to be merged with bigger lenders and would take over two small ailing banks for restructuring before they can be transferred to investors.
The director of a foreign investment fund said his fund is not interested in banks listing on the bourse as their ratios of profit to equity are small.
Healthy banks have listed large volumes of shares on the bourse, and investors can buy these shares easily if they want to.
