The increase in registered capital follows after its merger with State-owned Mekong Housing Bank (MHB). — Illustrative image/ Photo f319.com

The increase in registered capital follows after its merger with State-owned Mekong Housing Bank (MHB).

On April 25, the State Bank of Viet Nam issued Decision No.589/QD-NHNN on the merger. On the same day, the State Security Commission allowed the bank to issue 336.9 million shares, with a combined value of VND3.369 trillion ($160.43 million), to complete the merger, with every share of MHB converted into a share of the development bank.

BIDV Chairman Tran Bac Ha told a news conference in Ha Noi yesterday that after a month of merger, the bank's operation has been functioning efficiently.

Ha said they can sell stakes to foreign strategic partners next year as the country will surely integrate further into the world economy.

It will sell a 15-20 per cent stake to one of the long-term foreign investors in the banking sector and 10 per cent to another overseas investor, while state-ownership will be maintained at 65 per cent.

He added that the selling of stakes will have to follow a plan, which is approved by the Government, and should ensure benefits for the State as well as businesses.

The chairman refused to divulge the name of any foreign investor with whom they have been in talks with due to a confidentiality clause, and noted that it will depend on the performances of Viet Nam's stock market and its shares.

BIDV made its initial public offering (IPO) in 2011 and listed in HCM City Stock Exchange in 2012. However, the IPO fell into economic crises, affecting the prices of BIDV shares that never reached desired levels.

It has been one of the reasons that the consultancy firm suggested selling their stakes to foreign investors.

During the first half of the year, the economy recovered and GDP was expected to surpass 6.2 per cent.

"Based on these factors, BIDV will complete the selling of its stakes in 2016 for the maximum price as its share prices have been on an increasing trend," he remarked.

Last year, its total assets grew 17.4 per cent year-on-year to about VND45 trillion ($2.14 billion) and pre-tax profits reached VND162 billion ($7.71 million), reflecting a year-on-year increase of 14 per cent.

Its deposits jumped 14.4 per cent to more than VND37 trillion ($1.76 billion) and outstanding loans grew by 13.8 per cent to VND30.60 trillion ($1.46 billion) in 2014, with the bad debt ratio pegged at 2.72 per cent at the end of the year.

This year, the bank has targeted growth rates at 16.5 per cent for deposits and 16 per cent for lending and will control its bad debt ratio below 2.5 per cent. It also expects to earn VND7.5 trillion ($357.14 million) in gross profits and pay dividends at 9 per cent. — VNS