With the current heat of bank shares, all banks are planning to increase capital in 2018. In particular, many banks, including those which have listed and are about to list, are calling for capital from foreign strategic shareholders.
For example, the charter capital of Vietnam Prosperity Commercial Joint Stock Bank (VPBank) is currently 15.706 trillion dong. The bank aims to increase it by an addition of 12 trillion dong to 27 trillion dong in 2018.
VPBank’s capital increasing plan is divided into phases, including the distribution of dividends in shares and bonus shares, issuance of shares to employees, and implementation of private placement to call for investment capital from domestic and foreign investors. VPBank expects to offer a maximum of 15 percent of the total ordinary shares at the time of issuance.
Banks which are preparing to list shares are also in the process of negotiating with foreign partners to sell a proportion of stake within the allowed ratio.
Talking to the press recently, Chair of the Board of director (BOD) of Tien Phong Commercial Joint Stock Bank (TPBank) Do Minh Phu said that the bank plans to sell 15 percent of shares to investors via private placement and paying dividend at 28 percent in the last three months. TPBank aims to increase charter capital to 8.5 trillion dong from the current 5.840 trillion dong via share issuance.
Meanwhile, the BOD of Orient Commercial Joint Stock Bank (OCB) has approved the foreign ownership limit of 23.66 percent. According to the latest announcement of OCB, a foreign investment fund is currently holding 4.98 percent stake of the bank. Thus, the opportunity for foreign investors is very large.
Chair of OCB’s BOD Trinh Van Tuan said that the bank is negotiating with foreign strategic investor to attract foreign capital before listing its shares on the Hochiminh city Stock Exchange (HoSE).
Previously, in the end of 2017, Hochiminh city Development Commercial Joint Stock Bank (HDBank) also took advantage to finalise the ownership limit for foreign investors before listing shares on the HoSE in January 2018. Specifically, HDBank sold over 21 percent of stake to foreign investors and earned 300 million USD.
Preparation before listing
As bank share prices are increasing and the conditions of the stock and financial market this year is assessed as favourable, not only TPBank, many other banks have submitted shareholders to approve the plan to list shares early or register for trading on the Unlisted Public Company Market (UPCoM) this year.
Particularly, Chair of OCB said that the bank expects to list shares on the HOSE in the end of the third quarter or beginning of the fourth quarter of 2018, skipping the plan to register on the UPCoM before listing on HOSE which was set earlier.
On April 19th, TPBank will officially list 555 million shares on the HOSE at starting price of 32,000 dong per share, equivalent to a total value of 781 million USD. Thus, if the listing plan is carried out on schedule, TPBank will be the second bank to get listed this year, after HDBank.
Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) also announced to list shares on the official stock exchange before 2020. According to leader of the bank, the bank has finalised the ownership room for foreign investors at 25 percent.
After the divestment of HSBC, Vietnam Technological Commercial Joint Stock Bank (Techcombank) has welcomed a new investor. Specifically, the bank has announced the investment worth over 370 million USD (equivalent to 8.4 trillion dong) from two independent legal entities managed by Warburg Pincus. This investment is part of the bank’s efforts to increase charter capital from now until June 2018, before listing shares on the HOSE.
In fact, after a long time entering the huge restructuring in 2008, the banking sector has now recorded the sales of shares to foreign investors worth hundreds of million USD.
