BIDV prepares to launch IPO on City stock market

In 2012, BIDV's pre-tax profit was estimated at more than VND5.2 trillion ($247.62 million). The expectation is that it earned at least VND6 trillion ($285.7 million) in pre-tax profit this year.— Photo dantri

HA NOI (Biz Hub)— Shares of the Bank for Investment and Development of Viet Nam (BIDV), under the code BID, are expected to be listed on the HCM City Stock Exchange (HOSE) on Friday.

After HOSE's approval last Thursday of the bank's registration for listing, there will be 2.8 billion shares on offer for VND18,700 (US$0.89) each. The shares account for 5 per cent of the total capital in the stock market, making the shares of the banking industry total 27 per cent, leading the stock market in term of capital.

BIDV is the country's second largest bank by assets and networks, after Agribank. As of September 30, 2013, the bank's total assets were worth VND535.8 trillion ($25.5 billion) with 127 branches and nearly 700 outlets in 63 cities and provinces.

The bank, more than 95 per cent of which is owned by the State, held an IPO in late December 2011 at a price of VND18,600 ($0.88). The planned debut price is to be not less than 1.5 times that of the IPO price of VND27,800 ($1.32).

According to Tran Phuong, BIDV's deputy director, the stock market is witnessing signs of recovery because of an improvement in the economy. One of the most visible signs is the VN-Index jumping 8 per cent to a four-year high, which suggests that it is a good time for stock listings.

In 2012, BIDV's pre-tax profit was estimated at more than VND5.2 trillion ($247.62 million). The expectation is that it earned at least VND6 trillion ($285.7 million) in pre-tax profit this year.

Phuong said that BIDV plans to seek two foreign partners, who will have a total shareholding of 25-30 per cent after listing. A recent regulation, Government Decree No 1, allowing foreign strategic partners to own up to 20 per cent in a local bank's total shareholdings, is likely to make any investment in the financial markets more attractive to investors.

Experts said BIDV's listing will help increase the size and liquidity of the stock market, as well as the transparency of the banking sector, which is undergoing significant restructuring currently. — VNS