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Home / Economy / Banking & Finance
Vietcombank to offload 10% stake to foreign investors
Nguyen Tung 16:56, 2018/02/24
Vietcombank is planning to sell more than 350 million shares, or a 10% stake, to foreign investors in the first half of 2018 after securing the government`s approval.
The plan for the private equity placement had been approved by the relevant authorities, according to Vietcombank chairman Nghiem Xuan Thanh in a Nikkei Asian Review report. 
 
Vietcombank is the most profitable bank in the Vietnamese banking sector.
Vietcombank is the most profitable bank in the Vietnamese banking sector.
The shares will be issued by way of public auction or private placement to a limited number of foreign investors.

He added that Singaporean sovereign fund GIC was among the potential buyers. Japan's Mizuho Bank, the biggest foreign investor in Vietcombank with a 15% stake, will be allowed to buy additional shares to maintain its ownership ratio at the bank.

In Vietnam, foreign ownership in state banks is capped at 30%. Vietcombank is among the small number of banks that have a 9.12% stake reserved for foreign investors, stated Saigon Securities Research.

In order to raise capital by share issuance, Vietcombank originally expected to complete the transfer of a 7.7% stake to GIC in 2016. However, the deal was not approved due to share price disagreements. Hanoi wanted to sell the issuance based on the market price but not lower than the valuation price.

Vietcombank's shares closed at VND71,400 (US$3.14) on last Friday at the Hanoi Stock Exchange, having doubled in value since the end of 2016. 

​Previously, Vietcombank registered to offload 7.6 million shares of Vietnam Airlines, the bank announced on its official website.
 
The state lender currently holds 22.4 million shares, equivalent to 1.21% of the charter capital. In case the transaction is completed, Vietcombank's shareholding in Vietnam Airlines will be reduced to 0.8%. At the current market value, Vietcombank is expected to earn VND484 billion (US$21.2 million) in proceeds. 
 
Vietcombank's consolidated pre-tax profit in 2017 reached VND11 trillion (US$485 million), a sharp increase of 32.9% over the last year and 16% higher than the target, making it the most profitable bank in the Vietnamese banking sector, according to the bank's year-end meeting on January 12 to prepare its targets for 2018.
 
The bank's bad debt ratio was kept at 1.11%, a reduction of 0.35 percentage points compared to 2016, which is the lowest rate among Vietnam's credit institutions. Vietcombank's return on average assets (ROAA) and return on average equity (ROAE) were reported at 0.98 and 17.78%, respectively, while its net interest margin (NIM) increased by 2.47%. 
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