After the private placement, foreign investors will hold 15 per cent of BIDV’s charter capital. – Photo BIDV
Viet Nam’s largest lender, Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), on Monday announced it would issue more than 603.3 million shares as private placement to South Korean partner KEB Hana Bank.
Under Resolution No.696/NQ-BIDV issued by the bank’s board of directors, the total value of the deal is more than VND20.29 trillion (US$873.6 million). With the stock purchase, KEB Hana Bank will hold a 15 per cent stake in BIDV.
According to regulations, the foreign ownership ratio at Vietnamese banks is capped at 30 per cent of charter capital.
BIDV and KEB Hana Bank will carry out necessary procedures in accordance with the laws of the two countries to finalise the deal soon, BIDV said in the resolution.
The private placement is designed to increase BIDV’s charter capital to meet the minimum capital adequacy requirement of 8 per cent set by the State Bank of Viet Nam for 2020, which is in line with the Basel II international banking standards.
The move is also expected to help the bank improve the credit ratings of international institutions, enhance the prestige of its business operations and improve its capacity and competitiveness in domestic and international markets.
The bank has committed to ensuring the added capital is used efficiently to maximise the benefits for shareholders.
BIDV, which had total assets of more than VND1.37 quadrillion by the end of June this year and a network of more than 1,000 branches and transaction offices, has targeted achieving pre-tax profit of VND10.3 trillion this year with a bad debt ratio under 2 per cent of all loans.
Meanwhile, KEB Hana Bank is a member of Hana Financial Group – one of the largest financial groups in Asia. KEB Hana Bank boasts a wide network in South Korea and 144 transaction points in 24 countries. As of June 30, it had total assets of $308,303 million. In 2018, it was honoured as the best retail bank in South Korea.
Acquiring the BIDV shares will help the Korean bank expand its presence in Viet Nam. The country's economic performance has been stellar for years and many Korean companies have invested in the nation.
BIDV's shares closed at VND35,750 apiece on Monday, up 13 per cent from early this month. — VNS