Outlook of chartered capital increases at banks
06-SEP-2008 Intellasia | Dau Tu Chung Khoan page 29
Sep 6, 2008 - 7:00:00 AM
|
The market has seen optimistic development steps, however capital mobilisation of banks especially small sized banks remains hard. Different from companies that are allowed to issue shares at price of less than face value under Law on Business, commercial joint stock banks are disallowed to offer shares with such method. 2008 is the year banks must reach the minimum compulsory chartered capital of one trillion dong while the deadline to race follow the regulation is four months left. Whether can some small banks meet the rule?
Pursuant to the government's Decree 141/2006/ND-CP, According to the list of statutory capital levels for credit institutions prescribed in Decree 141/2006/ND-CP, by December 31, 2008 minimum chartered capital for a state-run commercial bank is three trillion dong, one trillion dong for a joint stock bank, US$15 million for a foreign bank branch, five trillion dong for a social policy bank, three trillion dong for an investment bank, five trillion dong for a development bank, while the statutory capital for a cooperative bank is one trillion dong. According to State Bank of Vietnam, if any banks and credit institutions do not meet the above requirement on statutory capital, they will be forced to merge with other larger banks or their business license will be revoked.
Presently, 10 joint stock banks are urgently increasing chartered capital to the ruled one trillion dong chartered capital, such as My Xuyen Bank (with the current chartered capital of 500 billion dong), Bac A Bank (940 billion dong), Giadinhbank (500 billion dong) and Pacific Bank (566 billion dong).
Among these banks, Kien Long Commercial JS Bank recently announced that it would offer nearly 42 million shares to scale up chartered capital. Of which, 40 million shares will be offered to existing shareholders at the price of 10,000 dong par and the remaining two million shares for the bank's employees at the same price.
On the other hand, bank share prices in the informal stock market just saw a slight surge. Shares of An Binh Bank are traded at 9,000-10,000 dong per share only, Southern Bank at 12,000-13,000 dong/share, VPBank 14,000-15,000 dong/share. Three of them are fairly large sized banks with the work covering most of localities. Absolutely small banks are afraid that their capital increase within this year will be hard to succeed. Earlier, by the third quarter of 2007 when Gia Dinh Commercial JS Bank announced to sell shares at the initial price of 40,000 dong each, only few investors registered to buy so the bank's share sale was abolished.
Regarding the success ability of share issues, Truong Hoang Luong, vice chair of Kienlong Bank confirmed that his bank's forthcoming share issue will be likely successful. The bank now has two strategic shareholders of Asia Commercial Bank (ACB) and Saigon Tourist with the holding of 10% stake each. Both institutions acquired to buy more shares of KienlongBank while other banks, companies and individuals also set a strategic investment in KienlongBank. The bank's share price currently stands at 13,000-14,000 dong per share so the chair believed that with the selling price equalling to face value, the share issue will bring in satisfactory results.
Another bank Petrolimex Gas and Oil Commercial Joint Stock Bank (PGBank) held a shareholders' meeting in May to pass the plan of raising chartered capital to one trillion dong. After being transformed from rural to urban bank model, the bank's share volume in circulation is very small so it is too hard to record its share price on the market. Two big shareholders of PGBank are Petrolimex Corp and Saigon Securities Inc (SSI). Speaking with Dau Tu Chung Khoan, Bui Ngoc Hao, general director of Petrolimex Corp said that the corporation is willing to pour more capital to increase its size in PGBank so the bank's goal to reach the compulsory minimum chartered capital of one trillion dong will not be too difficult.
Yet, these are two of ten banks forced to hike capital to one trillion dong in 2008. Thus, in the end of August, the State Bank of Vietnam released Document No 7910/NHNN-CNH requiring directors of its local branches to report the increases of chartered capital at commercial joint stock banks. Under it, joint stock banks with a chartered capital of less than one trillion dong are propelled to report capital increases for 2008, deployment method and implementation progress, and difficulties (if any) in accordance with Decree 141/2006/ND-CP. These local branches have responsibility to report results to SBV before September 10, 2008.
|
| |
|  |
|
Advertising
