The plan to have three to five commercial banks to list shares on overseas stock markets by 2025 is again under discussion.
The target was mentioned in the banking sector development strategy to 2025 approved last August.
Vo Tri Thanh, a respected economist, found ‘two positive points’ in the strategy. First, it sends a message to the world about Vietnam’s strong determination to restructure the banking system, and builds a healthy system that operates in accordance with international standards. Second, it will put pressure on banks and force them to undergo restructuring.
However, economists commented that it is very difficult to carry out the strategy. Commercial banks have been urged to list their shares on the Hanoi and HCM City bourses to ensure transparency in their operation, but this remains unattainable.
Nguyen Tri Hieu, a finance & banking expert, also said this is a difficult task, because Vietnam’s sovereign credit rating is low, and banks will have to pay high interest rates.
Standard & Poor’s has raised Vietnam’s sovereign credit rating from BB- to BB. However, with the upgrading, Vietnam is still among the countries not encouraging for investors. It is expected that Vietnam will still be in the area in the next three years.
“So, I don’t have optimism for the next three years, but things may get better after five years,” he commented.
Meanwhile, Can Van Luc, a financial expert, looks at the issue optimistically. He believes that the goal is attainable, especially in the context of Vietnam’s deeper integration into the global economy. Many overseas stock markets allow cross listing, and if Vietnam’s banks can satisfy the requirements set by the markets, they will be able to list shares there.
The listing will not only help banks improve the capability of mobilising more capital, but also help cement their position in the world market.
Also according to Luc, once banks can meet Basel lI standards, their credit ratings will improve which will be an important factor for foreign bourses to accept Vietnam’s share listing.
Sharing the same view, Vo Tri Thanh, former deputy director of CIEM, said he cannot say for sure if Vietnam’s banks will successfully enter the stock markets overseas, but if banks can fulfill the tasks of settling bad debts and applying Basel II standards, they won’t be refused.
According to Hieu, Vietcombank is the candidate with the most potential. The other banks include state owned banks BIDV, VietinBank and Agribank, and private banks Techcombank, VP Bank, ACB and MB.
