Banks are sluggish to list stocks
As 2018 is almost over, many local banks still have not shown any signs of listing on the Unlisted Public Company Market (UPCoM) as per their plan announced earlier on at the annual general shareholders’ meeting.
All commercial banks have been urged to complete procedures to register their stock on the Unlisted Public Company Market (UPCoM), as part of an attempt to enhance the transparency of banking operations in line with the prime minister’s Decision No.1058/QD-TTg, approving the scheme to restructure the credit institution system and deal with the issue of bad debts in 2016-2020, and Circular No.180/2015/TTBTC issued by the Ministry of Finance that guides registration for securities trading on UPCoM.
However, up until this point in time, merely half of the 35 local banks have actually been listed on the Ho Chi Minh City Stock Exchange (HSX), the Hanoi Stock Exchange (HNX), and UPCoM, despite the orders of the State Bank of Vietnam (SBV) and the State Securities Commission (SSC).
In his explanation of why banks are rather sluggish in their listing, Cao Sy Kiem, former governor of the SBV, said that the listing often requires complicated procedures with high transparency and accurate information to ensure the banks’ reputation. Should one of these criteria not be met, banks would not find it easy to list on the stock exchanges.
When it comes to transparency, the actual performance of a number of banks may not be consistent with their published financial reports. Listing on the stock exchanges in a weaker condition than otherwise thought is not something banks would like to do as it would severely affect their reputation.
“Listing on the stock exchange may well be a pressure for the bank itself and its shareholders,” noted Kiem.
Bank leaders said that listing shares should be carried out at the right time to raise stock liquidity and the reason for the delay in listing comes down to the stock market volatility that does not work to the advantage of bank stocks.
Tien Phong Commercial JSB (TPBank), Ho Chi Minh City Development Commercial JSB (HDBank), and Vietnam Technological and Commercial JSB (Techcombank) were those who got listed in the first two quarters of 2018, seizing the opportunity when the stock market prospered and large-cap stock prices rose.
In the case of Nam A Commercial JSB (Nam A Bank), Nguyen Quoc Toan, chairman of Nam A Bank, said that although the bank has planned to list on HSX, it had to put a pause to the progress due to the unfavourable developments on the stock market.
In the annual general shareholders’ meeting held on April 28, 2018, Nam A Bank’s board of directors asked shareholders for permission to select the appropriate time for listing. Nam A Bank, is still completing the procedures to get listed on UPCoM and subsequently HSX.
According to chairman of Orient Commercial JSB (OCB) Trinh Van Tuan, OCB is carrying out procedures to list shares on HSX and is expecting to complete them within the last quarter of the year. However, if there are no positive signs from the stock market, OCB will postpone the plan until next year. Besides, OCB wants to fix the foreign ownership limit (FOL) before its listing. The bank’s market capitalisation is expected to reach $1 billion upon its listing.
Other banks who are still in the progress of preparing the necessary procedures for share listing on HSX are Vietnam Asia Commercial JSB (VietABank), Vietnam Thuong Tin Commercial JSB (VietBank), Vietnam International Commercial JSB (VIB), and LienVietPostBank.