The story of withdrawing capital from the banking sector in recent time has drawn attention of public opinion. Many units invested in this sector earned huge profits, but some other made insignificant profits or even suffered loss (such as the 800 billion dong investment in OceanBank).
The reasons for the capital withdrawal are many, such as state-owned banks (SOEs) mainly have to comply with the direction of the government, while credit institutions (CIs) have to comply with Circular 36. Meanwhile, not many people understand the true story behind, but foreign investors often told the media that they were having other strategies, it was the good time to make profit, or the investment was no longer attractive, etc.
However, 2017 and early months of 2018 was the most prosperous time of the stock market in general and bank stocks in particular within the past decade. Thus, many investors perhaps are regretting that they have successfully divested. Meanwhile, those who have not withdrawn capital, due to reasons such as it was not the appropriate time or they were unable to find buyers of shares, are now feeling glad as the late birds seem to get more benefits.
Vietcombank is a typical example. According to Circular 36, the bank must to divest from numerous CIs such as MB, Eximbank, or OCB etc. It is known that Vietcombank planned to sell MB share when the price was ranging around 17,000-18,000 dong per share but the plan has not been implemented. Until now, MB share price has increased by more than twice, reaching around 36,000.
Similarly, EIB shares of Eximbank are now traded at 15,000-16,000 dong per share (30-40 percent), while when Vietcombank set the plan to divest in Eximbank, the stock price was just around 11,000-12,000 dong per share.
Vietcombank’s leader, last year, said that if the bank fully divests in MB and Eximbank, it would make over one trillion dong profit. However, in the current market condition, the profit will surely be higher.
In late 2017, Vietcombank also expected to make full divestment in OCB. There were only few buyers registered to buy the shares and OCB share price on the Over-the-counter (OTC) market was also lower than Vietcombank’s expected price of 13,000 dong per share. Thus, only two third of the shares were successfully sold. So far, since OCB share price on the free market is ranging around 17,000, much higher than the offer price of Vietcombank, the remaining one third of the shares scheduled to be auctioned in mid-April will surely be more attractive.
Another case is Eximbank. The divestment from Sacombank (STB) of Eximbank was also planned for a long time, due to the cross-ownership issue. However, the deal was only carried out in recent time, and the STB share price is also at the highest level in the past three years, reaching 15,000 dong per share, two times higher than the level recorded in the second half of 2016.
As estimated by Bao Viet Securities Company, the recent divestment from Sacombank has made a profit of up to 500 billion dong to Eximbank, a very huge number for the bank which is rising up from the bottom and has just got out of its accumulated losses.
The capital withdrawal from Sacombank of LienVietPostBank (LPB) was released by the bank’s leader to shareholders in early September before LPB shares were listed on the OTC. However, the withdrawal was postponed for the reason of “finding more appropriate time”, and was only conducted in the beginning of 2018. When LienVietPostBank sold STB shares, the share price was nearly 30 percent compared to the initial plan, a considerable number.
At the present time, many capital withdrawals from banks were unsuccessfully completed in the past, for different reasons, such as inappropriate time, lack of buyers, overly low prices, or some other reasons, such as the cases of VNPT and Maritime Bank, EVN and ABBank. Nevertheless, for the current prosperous market situation and the forecast that 2018 will be the year of bank stocks, the sale of stake at banks of businesses is certainly will be more favourable, and the matter of making non-core business divestments of SOEs may also soon be smoothly resolved.
