VietinBank issues tier-2 bonds 2019 to public
VietinBank issues tier-2 bonds 2019 to public
VietinBank has recently announced issuance of tier-2 bonds to the public, on offer from August 15 with total value up to VND5,000 billion at par.
The bonds are widely distributed at all transaction offices, branches of VietinBank or at transaction offices of VietinBank Securities Company (VietinbankSC), who acts as an issuing agent of the offering for the bank.
The bond issuance is aimed to improve capital capacity for the bank to ensure the safety limit ratios in accordance with the regulations of the State Bank of Vietnam (SBV).
The par value of the bond is set as low as VND10 million each with the aim to reach the mass market, especially those seeking a safe and long-term investment product (i.e. state-owned bank rating) but still being able to benefit from fluctuations of interest rate. Compared with 12-month term deposit interest rate, VietinBank bonds always carry a higher margin of 1.0%-1.2%/year depending on the maturity.
Investors can choose between the bond terms of 7 years or 10 years. In addition, VietinBank has the right to redeem entire bonds at the Redemption Date which is two years after issuance (with 7 year term bond) or five years after issuance (with 10 year term bond).
Similar to passbook or other highly liquid assets, bondholders can pledge their bonds at VietinBank or any other acceptance bank when having demand for funding. Particularly in VietinBank, bondholders can pledge VietinBank bonds as collateral to borrow with a maximum value up to 100% of the bond value.
VietinBank also offers attractive lending interest rates for bondholders, with the lending rates at some specific terms being only equal to the bond coupon rate. Bondholders have the full rights to transfer, sell, donate, inherit the bonds. These transactions can be executed easily through the wide network of VietinBank branches and Depository Agent - VietinbankSC.
Especially in 2019, customers who successfully register VietinBank Bond 2019 will be eligible to participate in the promotion programs including “Cash back” and “Lucky draw” when investing big enough value under this program.
Accordingly, individual/institutional customers who invest from VND200 million par value of VietinBank Bond 2019 will receive cash back immediately. Retail customers who buy from five bonds will participate in the lucky draw program with opportunities to receive many attractive rewards.
Besides public offering, VietinBank is also actively seeking for private placement. The bank has just recently announced for the third tier-2 bond private placement worth VND500 billion.
VietinBank has been the leading and active bank in issuing bonds to the public since 2017 with strong reputation in settlement of interest and principal. VietinBank is currently the bank with strongest shareholder structure with 64.46% of charter capital owned by the Government, 19.73% owned by MUFG (Japan's largest bank) and more than 8% by IFC International Finance Company (a member of the World Bank).
VietinBank’s network spreads out with a nationwide system of 155 branches and nearly 1,000 transaction offices, two representative offices and two branches in Germany and one bank subsidiary in Laos with advantages in outstanding information technology infrastructure. Currently, VietinBank is gradually implementing the restructuring plan in accordance with the Government's orientation and the SBV's approval, aiming at the goal to become 1 in 2 first Vietnamese banks to get listed on the international stock market and being in the Top 100 biggest banks in Asia with sustainable, safe, efficient growth.
Accordingly, as of the end of the second quarter of 2019, VietinBank's business result showed a positive growth over the same period in 2018 with vibrant shift in income structure. Net income from service activities increased by 63%, while income from FX trading increased by 120% over the same period in 2018. These outstanding figures are also the highest growth rate over the last five years. It is expected that in 2019, VietinBank's consolidated pre-tax profit will reach VND9,500 billion (of which, VietinBank’s separate pre-tax profit will reach VND9,000 billion).
Ranked at 242 in 2019 Global Ranking of Brand Finance, VietinBank is the first Vietnamese bank listed in the Top 300 most valuable banks brand in the world in 2019 and seventh time consecutively being in the Top 500 most valuable bank brands in the world. VietinBank rating steadily stays at “BB-” for Long-term debt issuer (Long-term IDR) and ceiling support from Government (SRF) by Fitch, and this organization also upgrades the Long-term IDR Prospect of VietinBank to "Positive". Moody Investor Services, Inc (“MIS”) has also upgraded the long-term local issuer ratings of VietinBank to Ba3.
