Vietcombank sells shares to fund capital hike

Tuesday, Jan 08, 2019 08:57

Vietcombank’s pre-tax profit hit a record high of VND18 trillion (US$769.3 million) in 2018. — Photo Vietcombank

Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) sold shares worth US$265 million to foreign strategic investors to increase its charter capital.

According to the bank, it successfully completed a private placement of nearly 111.11 million new shares to Singapore’s sovereign wealth fund, GIC Private Limited (GIC), and one of Japan’s largest financial services provider, Mizuho Bank Ltd (Mizuho).

Earlier, after getting approval from the State Bank of Viet Nam (SBV) last month, Vietcombank also got the nod from the State Securities Commission last week to sell some 3 per cent of its charter capital to the investors.

On December 12, SBV approved Vietcombank’s proposal to sell shares to GIC and Mizuho. Under the proposal, GIC is expected to hold 2.55 per cent of shares while Mizuho – which is Vietcombank’s largest current foreign investor – will buy the remaining shares to maintain its holding of 15 per cent at Vietcombank.

After completing the sale, the shares will not be transferable for one year.

With the sale, Vietcombank will complete the capital hike to VNĐ37.1 trillion (approximately $1.6 billion) to meet a capital adequacy ratio (CAR) of at least 8 per cent as per the SBV’s Basel II norms, starting in 2020.

After three years of restructuring, Vietcombank’s business performance took a leap in 2018. Its pre-tax profit hit a record high of VND18 trillion (US$769.3 million) last year, up 60 per cent against 2017 and nearly triple that of 2015 – the year the bank started its restructuring.

The result far surpassed the bank’s target of VND13 trillion set for 2018 at the annual general meeting of shareholders early last year.

The high profit was attributed to the bank’s success in promoting non-credit services, which accounted for more than 40 per cent of the bank’s total profit.

Besides high profits, last year also saw Vietcombank divest from Military Bank, Eximbank and Saigon Bank to meet SBV’s regulations on holding below 5 per cent ownership at other credit institutions.

Vietcombank shares (VCB) closed Monday morning trading at VND55,200 apiece, up 1.2 per cent against last Friday. — VNS

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