Vietcombank to sell 3 percent stake to foreign investors

By Minh Son, Dat Nguyen    January 6, 2019 | 08:52 pm PT
Vietcombank to sell 3 percent stake to foreign investors
A woman rides a bicycle past a logo of Vietcombank, in front of the State Bank building in central Hanoi. Photo by Reuters/Kham
Vietcombank, Vietnam’s largest bank by market cap, has received permission from the securities watchdog to sell a 3 percent stake to foreign investors.

The green light from the State Securities Commission (SSC) will allow the lender to make a private placement of 3 percent as part of its plan to ultimately sell 10 percent.

The 3 percent could fetch around $270 million based on its current stock price.

Vietcombank last month received approval from the State Bank of Vietnam (SBV) to increase its charter capital by selling 10 percent to the Government of Singapore Investment Corporation (GIC) and existing strategic partner, Japanese bank Mizuho.

Now GIC will buy 2.55 percent while Mizuho Bank will buy the remaining 0.45 percent to keep its current 15 percent stake unchanged.

Last September the SBV approved Vietcombank’s proposal to increase its charter capital from VND35.98 trillion ($1.55 billion) to VND39.57 trillion ($1.7 billion). The capital has remained unchanged since 2016.

Vietcombank is one of many Vietnamese lenders that have been seeking to increase capital to meet international capital adequacy norms.

The country’s banks need to increase their charter capital to meet the Basel II capital adequacy ratio (CAR).

The accords prescribe capital of 8 percent of risk-weighted assets for all financial institutions, including in Vietnam, to cover operational risks.

State-owned BIDV, the second biggest bank by market capitalization, said last October it wanted to sell new shares to South Korea’s KEB Hana Bank, giving it a 15 percent stake in the company. The sale would be worth $735 million.

Vietnam caps foreign ownership of banks at 30 percent. The country has nine wholly-owned foreign banks, four state-owned banks and 31 domestic joint-stock banks.

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