Vietcombank set to up capital to $1.74 billion

Apr 29th at 18:47
29-04-2017 18:47:48+07:00

Vietcombank set to up capital to $1.74 billion

Vietcombank (VCB) shareholders approved the lender’s plan to issue an additional 360 million shares, equivalent to 10 per cent of its capital, to expand its charter capital to almost VND39.6 trillion (US$1.74 billion).

 

The shares will be sold either to the public or offered to no more than 10 investors (including existing shareholders) in a private placement in late 2017 or next year.

The selling price will not be lower than the price chosen by a valuation institution and its closing price on the HCM Stock Exchange on the trading day preceding the issuing date.

Vietcombank plans to use about VND3 trillion of the proceeds from the issuance to expand lending and other business activities, as well as fund possible mergers and acquisitions (M&As).

At the bank’s annual shareholders’ meeting on Friday, its chairman Nghiem Xuan Thanh said M&As would be a long-term strategy and should ensure that Vietcombank expands its network and accesses new markets.

Regarding this criteria, Thanh said Vietcombank has not yet found suitable partners.

Vietcombank has two major stakeholders, of which the State Bank of Vietnam owns 77.11 per cent and Mizuho Bank 15 per cent. Mizuho is the only foreign strategic investor of Vietcombank.

In August last year, Vietcombank and Singapore sovereign wealth fund GIC signed an agreement for GIC to acquire a 7.73 per cent stake, equivalent to 305.8 million new shares in the bank’s planned private placement of nearly 360 million new share issue.

The transaction, subject to approval by the Prime Minister and the State Bank of Viet Nam, has not taken place as by the end of last year GIC’s offer was considerably lower than market value. Thanh said Vietcombank would re-negotiate with GIC for a better price.

Vietcombank is the most expensive bank on the stock exchange with a share price ranging around VND35,000 ($1.54) a share. It is also the biggest listed lender with market capitalisation at VND126.3 trillion ($5.6 billion) on Friday.

Divestment from other banks

Vietcombank holds capital in five other credit institutions, three more than allowed by the State Bank of Viet Nam.

Chairman Nghiem Xuan Thanh said the bank would divest from the banks in which its stakes were not high, including Orient Commercial Joint Stock bank (5.07 per cent), SaigonBank (4.3 per cent) and Cement Finance Joint Stock Company (10.9 per cent) for a combined value of about VND300 billion.

Vietcombank sought to offload stakes in these institutions last year but failed due to low market liquidity.

The lender plans to retain its holding in Military Bank (7.16 per cent) given the bank’s positive performance and stable dividend payout. However, it will seek the central bank’s approval to divest 8.19 per cent of capital from Eximbank (EIB).

Vietcombank’s shareholders also approved the 2017 business targets, including growing pre-tax profit by 8 per cent year-on-year to VND9.2 trillion and increasing total assets 11 per cent to VND874.6 trillion.

The dividend rate will remain at 8 per cent this year.

The bank expects to expand its credit outstanding by 15 per cent to VND547.1 trillion, total capitalisation up 14 per cent to VND684.8 trillion and keep the bad debt ratio below 2 per cent.

In the first quarter of this year, the bank reported pre-tax profits of nearly VND2.65 trillion, up 15 per cent year-on-year. Last year, it earned pre-tax profits of over VND8.5 trillion, up 25 per cent year-on-year.

bizhub



NEWS SAME CATEGORY

ATM services must be ensured during holiday: State Bank

State Bank of Viet Nam (SBV) has urged commercial banks and card issuers to ensure smooth operation of automatic telling machines (ATMs) during the forthcoming...

NCB to raise total assets to $4.2 billion

The National Citizen Joint Stock Commercial Bank (NCB) will raise total value of its assets to VND95 trillion (US$4.2 billion) in 2017, up nearly 40 per cent from...

VIB shareholders approve payout of 44.6% in dividend

Vietnam International Bank (VIB) received shareholders approval to distribute 44.6 per cent dividend payment rate in 2016, including 5 per cent in cash and 39.6 per...

Korean banks expand in Vietnam

Following Shinhan Vietnam’s successful acquisition of ANZ Vietnam’s retail business, fellow Korean banks have also expanded their s and market share in Vietnam...

Vietcombank to lend VND60 billion to egg processing plant

Vietcombank lent Viet Nam’s leading egg supplier Ba Huan Company Ltd VND60 billion (US$2.6 million) to build a high-tech egg processing plant in Ha Noi.

Small banks working to bolster capital sources

Most banks of small and medium are mulling over scaling up capital sources to boost their financial strength.

Vietcombank, Indovina Bank pledge $64m for HCM City ring road

Vietcombank and Indovina Bank have signed an agreement with Van Phu Bac Ai JSC to provide VND1.46 trillion (US$64.32 million) to finance construction of a section...

HDBank to raise charter capital to $389m

The HCM City Development Joint Stock Commercial Bank (HDBank) will increase its charter capital to almost VND8.83 trillion (US$389 million) from the curent VND8.1...

Aviva acquires entire shareholding in Vietnam JV

The multinational insurance company Aviva Plc has announced the acquisition of VietinBank’s entire 50 per cent shareholding in its life insurance joint venture...

Foreign capital eyeing Vietnamese fintech

Foreign investment funds have expressed renewed interested in Vietnamese financial technology startups, despite a series of challenging setbacks that occurred in...

Bank stocks

Insurance stocks


MOST READ


Back To Top