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Home / Economy / Banking & Finance
Vietnam c.bank approves 10% increase in Vietcombank's charter capital
Ngoc Mai 15:36, 2018/09/21
Vietcombank, Vietnam`s largest lender by market value, is allowed to increase its charter capital from VND35.97 trillion (US$1.55 billion) to VND39.57 trillion (US$1.7 billion) by selling 10% stake to foreign investors.
The State Bank of Vietnam (SBV) on September 19 approved the proposal of the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) to increase the latter's charter capital by 10% through private placement, announced the SBV. 
 
Illustrative photo.
Illustrative photo.
Under the decision, Vietcombank, Vietnam's largest lender by market value, will now increase its charter capital from VND35.97 trillion (US$1.55 billion) to VND39.57 trillion (US$1.7 billion) by selling 10% stake to foreign investors. 

"Vietcombank is responsible for increasing its charter capital in compliance with the law. After completing legal procedures, Vietcombank have to submit to the SBV's governor related documents for review and approval," SBV stated. 

The Vietnamese lender announced its plan to sell a 10% stake to a maximum of ten foreign investors at its annual shareholders' meeting in May. 

"The offer for sale has attracted many foreign investors, including Singaporean sovereign wealth fund GIC. Japan's Mizuho Bank, the bank's largest foreign shareholder with a 15% stake, is also entitled to buy more shares to maintain its stakeholding at the bank," Vietcombank CEO Pham Quang Dung told local media. 

He also emphasized that the lender would favour foreign investors with a strong financial track record. Vietcombank is also considering allocating board seats to foreign investors after the stake sale. 

On September 13, the Hanoi Stock Exchange (HNX) informed that Vietcombank will auction 53.4 million shares out of the total 150.6 million shares it holds in Military Bank (MB). The auction is scheduled to be held on October 15 at the HNX. 

At the starting price of VND19,641 (US$0.84) apiece, Vietcombank is expected to book proceeds of at least VND1.04 trillion (US$44.52 million). 

Once completing the sale of 53.4 million shares in MB, Vietcombank will reduce its holding at the bank to 4.5% and is no longer MB's major shareholder. 

Vietcombank previously divested its shares in a number of credit institutions, including SaigonBank, Cement Finance Company (CFC) and entire shareholding in Orient Commercial Bank (OCB) on September 6. 

In the first six months of 2018, Vietcombank's pre-tax profit reached VND8 trillion (US$349.4 million), up 53% year-on-year, according to the lender's quarterly consolidated financial statement. 

As of June 30, the bank's total assets were valued at VND977.6 trillion (US$42.7 billion), down 5.6% compared to the beginning of the year, mainly due to the bank's reduction in deposits at the State Bank of Vietnam (SBV) and other credit institutions. 
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