Vietinbank to issue bonds worth $370m
Vietinbank to issue bonds worth $370m
Vietnam Joint Stock Bank of Industry and Trade (Vietinbank) plans to issue VND8 trillion (US$370.37 million) in secondary bonds this year.
This was confirmed by Nguyen Van Thang, Chairman of Vietinbank's Board of Directors, according to online newspaper Dan Tri, reporting early last week.
The bank is to issue the secondary bonds with maturities from five to ten years as part of a plan in which Vietinbank would increase its chartered capital from VND37.2 trillion (more than $1.72 billion) in 2013 to VND49 trillion ($2.26 billion) by the end of this year, he said.
Issuing secondary bonds would also help the bank continue its sustainable development, expand its influence in the market and maintain control over financial risks, he said.
Besides issuing bonds, Vietinbank would also complete its acquisition of PG Bank this year, which was expected to add another VND3 trillion ($138.8 million) to the bank's capital, he said.
After being equitised in 2008, Vietinbank has achieved significant development in its business scope and efficiency.
In fact, the bank is now among the leading large banks in the domestic banking sector, with chartered capital having increased from VND11.25 trillion ($521 million) at the end of 2009 to VND37.2 trillion ($1.72 billion) at the end of 2013.
Thang said that raising the chartered capital would help Vietinbank expand its business activities as one of the leaders in the banking industry in order to meet the demand for capital among local enterprises and the public.
With higher capital levels, Vietinbank would also be able to carry out new business strategies, such as increasing its assets, standardising its products and services, improving its internal administration and human resource management, as well as improving its retail sector, he added.
Raising capital levels would allow Vietinbank to integrate into international markets and assist the Government with the State Bank of Vietnam to properly implement policies on exchange rates, interest rates and credit growth, in an attempt to stabilise the macro-economics and limit inflation, he added.
In addition, stronger and healthier capital would help the bank cope with financial risks that might arise on the financial market, Thang said.
Based on the new chartered capital, the bank would meet the requirements set by the Basel II Accord, which was initiated in 2004 to control the amount of capital a bank needs to guard against financial and operational risks, and in order to join any international financial markets throughout the world, Thang said.
Thang added that raising the capital to VND49 trillion ($2.26 billion) allows Vietinbank to have equal capital and compete with other banks in the region.
Vietinbank is also expected to become the first Vietnamese bank that meets regional standards for capital, corporate governance, technology and competitiveness, he said.
In recent years, Vietinbank had reviewed its available capital and calculated how much capital it would need, he said, adding that raising capital was necessary to improve the bank's ability to settle financial and operational risks, as well as satisfying international regulations in overseas markets.
