High return from share (ACB) sale
High return from share (ACB) sale
The Asia Commercial Joint Stock Bank (ACB) may earn between VND1.3 trillion (US$57.8 million) and VND1.5 trillion from selling treasury shares, according to HCM City Securities Corp (HSC).
ACB is holding more than 41.4 million treasury shares out of its 1.12 billion listed on the Ha Noi Stock Exchange, equal to 4.03 per cent of the total shares.
The bank bought those treasury shares back from investors in January 2015, May 2014 and July 2013 for an average price level of VND16,080 (71.5 US cents) per share.
HSC said in a recent report there has been no news about of the bank selling its treasury, however, it could be a good way to increase its charter capital.
If ACB decides to sell at the current market price, it could generate VND1.3 trillion to VND1.5 trillion in profit that could be added into the bank’s share premium.
ACB shares closed Wednesday at VND38,400 per share, nearly 2.4 times the average price the bank paid.
ACB has some VND3 trillion worth of guarantees related to various loans, including stocks and some real estate projects. The bank is forecast to sell entire or a part of those assets in the next few years, HSC said.
HSC also forecast that ACB would record VND6 trillion in pre-tax profit, a yearly increase of 127 per cent.
Total lending and raised deposit would rise 18 per cent each to VND234 trillion and VND284 trillion at the end of the year, HSC said, adding that the bank’s net interest margin (NIM) rate would increase to 3.55 per cent from 3.48 per cent in 2017.
ACB would be able to reduce its provision set aside to pay for anticipated future losses by 81 per cent as it would clear entire VAMC bonds and loans to eight companies involved in the prosecution of the bank’s former chairman Nguyen Duc Kien, HSC said. The bank’s non-performing ratio is also estimated at 0.8 per cent this year.
