‘King’ shares still remain ‘hot’

07-Oct-2017 Intellasia | Dau tu Chung khoan | 6:00 AM Print This Post

Bank shares are proving its power and regaining the much attention of investors.

According to experts, there are many factors that determine the price of a stock, including external effects such as the supply and demand differential, the market context and, in particular, the internal factors of the business. It is evidenced that VPB-coded share has been bought up very strongly by the investors, even hitting 37,00038,000 dong/share, three times higher than that at the beginning of the year.

Nguyen Duc Vinh, VPBank’s general director, said that the three key factors that have contributed to the success of VPBank over the past years are as follows: firstly, accurately identifying goals, persistence and focus on determined targets. Secondly, the team has a consensus. Thirdly is the best combination on the market.

“Seven years ago, we identified VPBank’s path is retail, serving the majority, including those who have little or no access to banking services,” Vinh said. So far, this strategy is working quite positively.

After VPBank went public, a newcomer that is expecte to contribute significantly to the attractiveness of the group of “king” shares is LienVietPostBank (coded LPB) with the maiden trading session on UPCoM being slate on October 5. The reference price on the first trading session is 14,800 dong each.

According to the statistics of VNDirect Securities Co, at the end of 2016, LienVietPostBank ranked 13/35 commercial banks in Vietnam in terms of total assets. Remarkably, with the strong growth of profitability in 2016 and the first quarters of 2017, LienVietPostBank has risen to the third largest non-state shareholding commercial bank in terms of ROA and ROE, with the first and the second belonging to VPBank and Techcombank.

In addition, this is one of the few banks with significantly improved NIMs with 2.9 percent in 2014, 3.1 percent in 2015 and 3.5 percent in 2016. The LienVietPostBank’s deposit rates are among the lowest in the market due to the good liquidity (low loan to deposit ratioLDRaround 72 percent at the end of 2016) thanks to the advantage of cheap capital sources.

However, when talking about the plan to list shares on UPCoM market, Nguyen Duc Huong, Chair of LienVietPostBank only emphasized, the bank’s main point in this plan is to be the first joint-stock commercial bank whose shares will be held by all staff, from leaders to employees.

This policy, Huong added, is to create conditions for all members of the system to be responsible for the “common pot” namely the prestige, effective operation of the bank, have a sense of protecting the LienVietPostBank brand.

“If all are shareholders, then the Bank’s operations are the responsibility and benefit of each person. As soon as LPB shares are listed on UPCoM, we will carry out the plan to increase charter capital through the issuance of shares to existing shareholders and especially to employees, “said Huong.

In fact, in the first months of 2017, the growth of banking stocks averaged 35.2 percent and there were also higher growth stocks such as NVB. SHB, ACB, MBB, STB reached growth of over 40 percent. In addition to benefiting from the strong growth of the stock market in the first half of 2017, banking stocks are also supported by expectations of bad debt treatment.

Resolution No. 42/2017/ QH14, officially taking effect since August 15, 2017, together with Directive No. 32/ CT-TTg dated July 19, 2017 are helping deal with bad debts in many ways, bringing about high effect.

Huong said that as of the end of Q2/2017, LienVietPostBank’s bad debt ratio was controlled at a low level of 1.3 percent. However, if calculating the bad debt being sold to VAMC, the bank’s bad debt ratio was nearly 2.6 percent.

LienVietPostBank’s outstanding loans being sold to VAMC in 20132015 period were 358 billion dong, 1.233 trillion dong and 1.334 trillion dong respectively. Since 2016, the bank has not sold debt to VAMC. With this sold bad debt, LienVietPostBank plans to complete all the bad debt being sold to VAMC in 2018.

In addition, the bank’s business and profit are expected to see high growth in 2017. With credit growth of over 20 percent, net interest income of banks will also increase as the main profit structure of banks still comes from credit activities (accouting for over 80 percent).


Category: Finance, Vietnam

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