Epidemic slows down banks’ progress

27-Feb-2020 Intellasia | Dau tu Chung khoan | 6:02 AM Print This Post

Since the beginning of the year, no bank had listed stocks on the stock market as prescribed. Besides, the ability to perform in Q1/2020 was not appreciated. All these were largely due to the effects of the Covid-19 flu.

Orient Commercial Joint Stock Bank (OCB) had been planning to list stocks on the Hochiminh Stock Exchange (HOSE) for many years, but for many reasons so far it had not been implemented. Previously, OCB Chair Trinh Van Tuan said that the bank would list shares on HOSE at the end of 2019 or early 2020. However, because the stock market at the end of the year was not so favourable, OCB delayed the listing process.

Also, when the disease situation was still going on, the stock market and the banking industry found it hard to avoid the impact, so OCB’s listing ability in Q1/2020 was also difficult to carry out.

On the other hand, before listing, OCB also wanted to close the selling rate to foreign investors. Currently, the room for foreign investors’ share at OCB was quite large, when there was only one investment fund under VinaCapital Group holding five percent of capital at this bank.

Recently, the market informed that Japan’s Aozora Bank would buy 15 percent OCB’s equity before April 2020, the value of the deal was about 15 billion Japanese Yen, equivalent to $139 million, after that the new OCB would list.

The listing had to be at the right time to rise when the stock price increased, thereby ensuring the best interests of shareholders and investors, OCB leaders said.

Similarly, the plan to list on HOSE in 2020 would be implemented by Nam A Commercial Joint Stock Bank (Nam A Bank) after selling shares to domestic and foreign partners. The offering ratio was about 20 percent of the capital. Nam A Bank had just been approved by the State Bank of Vietnam (SBV) to raise capital from more than 3 trillion dong to 5 trillion dong this year. According to a senior leader of Nam A Bank, many foreign investors were negotiating with the Bank, hoping to own shares of Nam A Bank.

The policy of Nam A Bank in attracting strategic shareholders was to find investors who had a vision and a strategy consistent with the Bank’s development strategy. Nam A Bank was one of the banks with a full room for a foreign ownership cap.

Late last year, HOSE received nearly 1.175 trillion shares of Vietnam Maritime JointStock Commercial Bank (MSB). Currently, there were 10 listed bank shares, including VCB, CTG, BID, TCB, MBB, HDB, TPB, EIB, STB, and VPB. There were three banks’ stocks on the Hanoi Stock Exchange (HNX), including ACB, SHB, NVB. On the Unlisted Public Company Market (UPCoM), there were four bank stocks, including LPB, VIB, BAB, VBB.

Under the scheme to restructure the stock market and the insurance market, all banks must list stocks on the stock exchange by 2020 at the latest.

However, whether or not the stock would be listed depended on many factors. For example, the listing must be approved by the general Meeting of Shareholders, which this year’s bank meeting season expected to take place later than every year due to the effects of the Covid-19 flu, between March and April 2020, next to business goals.

Viet Capital Commercial Joint Stock Bank (Viet Capital Bank) had completed the procedure to bring shares to trade on UPCoM. On September 16, 2019, the Vietnam Securities Depository (VSD) announced the issuance of a securities registration certificate to Viet Capital Bank, stock code BVB, with chartered capital of 3.171 trillion dong, equivalent to 317.1 million registered shares, but the official trading day was still open.

The investment strategy building report in 2020 announced by Bao Viet Securities Company (BVSC) showed that the company stock had dropped expectations for banking groups, while the higher rating was for production, processing, and manufacturing groups. The profit growth of banks would slow down and lack of sudden factors this year. One of the reasons for the decline came from the slowdown of the real estate market. Besides, the bank’s lending activities also had to compete more with the corporate bond channel and cheap capital from the outside, while the low interest rate environment also caused investment in government bonds to reduce, the report said.

However, the business goals set by the banks were still quite ambitious. In particular, many banks set up a profit plan of 10 trillion dong to 20 trillion dong before tax.

In fact, many small and medium-sized banks had achieved trillion dong profit last year and continued to maintain this target this year, while the few were expected to reach a profit of several hundred billion dong.

 


Category: Finance, Vietnam

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