Vietcombank, BIDV gear up for significant capital increases in 2025

Vietcombank, BIDV gear up for significant capital increases in 2025

Vietcombank plans to execute a private placement of 6.5 per cent of its equity, while BIDV anticipates raising about VNĐ4.8 trillion (US$188 million) through the issuance of 123.8 million shares in the first quarter of 2025.

A bank teller talks to a customer at a transaction office of Vietcombank. — VNA/VNS Photo

Vietcombank and BIDV are poised to undertake significant financial manoeuvres this year, underscoring the dynamic landscape of the country's economy. 

Vietcombank plans to execute a private placement of 6.5 per cent of its equity, while BIDV anticipates raising about VNĐ4.8 trillion (US$188 million) through the issuance of 123.8 million shares in the first quarter of 2025.

According to MB Securities Company, Vietcombank's planned equity issuance is estimated to be worth around $1 billion. 

Originally slated for 2024, the transaction was postponed, but the bank is now optimistic about its successful completion in 2025. This move aligns with the bank’s efforts to enhance its capital structure and meet increasing regulatory requirements under Basel III standards.

Banking experts suggest that this private placement will bolster Vietcombank's capital adequacy ratio (CAR), an essential metric that reflects a bank's financial health and stability. 

As of the end of 2024, most Vietnamese banks have met the Tier 1 capital requirements of at least 6 per cent, stipulated by Basel III, but Vietcombank's proactive approach aims to ensure it remains competitive in the evolving financial landscape.

BIDV is also gearing up for substantial capital acquisition. The bank plans to issue 123.8 million shares at a price of VNĐ38,800 each, which is expected to generate over VNĐ4.8 trillion. Once it is successful, the lender's charter capital exceeds VNĐ70.2 trillion. 

This initiative is critical for BIDV as it seeks to enhance its capital base, particularly given its current CAR is slightly below that of its peers.

The funds raised from this issuance will be allocated towards various operational needs, including business expansion, credit activities and technological upgrades. This strategic allocation underscores BIDV's commitment to strengthening its competitive position in the market and improving service delivery to its customers. 

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