National Citizen Bank green-lighted to raise charter capital
National Citizen Bank green-lighted to raise charter capital
Vietnam’s National Citizen Bank has received the permit to raise its charter capital to VND5 trillion ($217.4 million).
The State Bank of Vietnam has just released Document No.9256/NHNN-TTGSNH that allows National Citizen Bank (NCB) to increase its charter capital from VND3 trillion ($130.4 million) to VND5 trillion ($217.4 million). NCB will do this by issuing new shares to its employees and existing shareholders, in accordance with the agreed proposal in the 2018 annual general shareholders' meeting.
The document stated that NCB must comply with the Law on Financial Institutions when raising its charter capital, including any ownership limits on existing shareholders and related parties. During the process, shareholders should ensure that the capital they use to buy NCB’s shares is legal. This means the shareholders cannot borrow money from foreign-owned financial institutions or invest in another person’s name, unless entrusted by that person via written agreements.
Within the next 12 months, if NCB cannot finalise its share sale, the document will be made null and void.
Economist Nguyen Tri Hieu said the capital raise is a positive move for NCB, and the green-light from Vietnam’s regulators is a “clean bill of health” for the commercial bank. The permit means that the State Bank agrees with NCB’s expansion plans and the efficiency of the capital raise plan.
The bank also announced its third quarter results, in which accumulated pre-tax profits went up by 80 per cent year-on-year. Accumulated pre-tax profit also grew by 90 per cent from the same period last year, reaching VND1.27 trillion ($55.2 million). According to the consolidated financial reports, in general, earnings from services almost doubled from last year.
On the stock market, NCB’s stock price has rallied, making it one of the top 20 performers on the Hanoi Stock Exchange. Liquidity is higher and investors are paying close attention to the stock, with one or two million NCB shares exchanging hands in every trading session. The peak was August 15 and 30, when the daily liquidity of NCB’s stocks reached five million.
