Bank for Foreign Trade of Vietnam, commonly known as Vietcombank, has just got the central bank’s green light to sell a 15% stake to Japan’s Mizuho Bank, a deal when concluded will substantially lever up the local bank’s equities.
A document of approval was issued and sent by the State Bank of Vietnam to Vietcombank on Tuesday.
Sources said an official agreement would be signed this Friday between Vietcombank and Mizuho, wrapping up a four-year-long process by Vietcombank to look for a strategic investor. Concrete details including the value of the stake has not been disclosed.
However, a source from Vietcombank told the Daily on Tuesday right after the central bank’s approval that some 347.6 million shares would be issued to the foreign strategic investor.
The source said the stake is worth around US$570 million, or over VND34,000 a share, much higher than Vietcombank’s current share price of VND26,600 at the trading session on the local stock exchange on Tuesday. The stock VCB saw over 307,000 shares changing hands on Tuesday.
The stock price of VND26,600 on Tuesday was 1.5 times the bank’s book value, which is the average compared to other banking stocks on the equity market.
Ban Viet Securities said the stake transfer as well as the retained profit would strongly buoy up Vietcombank’s capital, enabling its expansion scheme.
An expert at Vietcombank Securities Company commented that State-owned commercial banks still play a dominant role in Vietnam in the medium and long term owing to their capital, assets and networks.
The combined chartered capital of the four largest State-owned commercial banks – namely Agribank, Bank for Investment and Development of Vietnam (BIDV, Vietcombank, and Viettinbank – amounts to VND64 trillion, with Agribank alone accounting for nearly one-third of the total.
These four banks made up almost half of the total outstanding loans of the banking industry last year.
Apart from Vietcombank as the pioneer in the Government’s program to equitize State-owned commercial banks, other State lenders are also looking for foreign strategic investors.
VietinBank, the second biggest State lender in terms of total assets, is also in talks to issue shares to a second foreign investor behind IFC. BIDV, meanwhile, is completing its equitization plan under the guidance of the State Bank of Vietnam.
The Saigon Times Daily