Small banks simultaneously raise capital

01-Nov-2018 Intellasia | InfoMoney | 6:26 AM Print This Post

As the market flourishes and business results are positive, many small banks plan to increase capital and list shares on the stock exchanges.

The State Bank of Vietnam (SBV) has approved the plan to increase capital from three trillion dong to 3.5 trillion dong of Viet Capital Joint Stock Bank, according to the capital raising plan approved by the bank’s Shareholder Committee. At its annual shareholders meeting in 2018, VietCapitalBank’s shareholders approved two phases of the bank’s capital increase plan with the goal to increase charter capital by respectively 200 billion dong and 500 billion dong to three trillion dong and 3.7 trillion dong, respectively.

Meanwhile, Nam A Commercial Joint Stock Bank (NamABank) has issued shares for paying dividends, based on the 2018 Resolution of the bank’s Shareholder Committee. Issuing shares to pay dividends is one of the two methods used by NamABank to increase its charter capital to five trillion dong from the current 3.021 trillion dong.

Accordingly, NamABank has paid dividends at a ratio of 11%, increasing the total charter capital by 332 billion dong. In addition, the bank will further raise its charter capital by issuing ordinary shares with a volume of more than 164.6 million shares. The bank expects to collect 1.646 trillion dong from this offer. The issuance is for existing shares (expected to be 906 billion dong), the bank’s employees (expected to be over 45 billion dong) and external investors (expected to be around 695 billion dong).

Similarly, Vietnam Thuong Tin Commercial Joint Stock Bank (VietBank) has received approval from the SBV on its plan to increase charter capital to over 4.256 trillion dong from the current 3.249 trillion dong by issuing shares for existing shareholders and issuing shares based on employee stock ownership plan (ESOP). This plan was approved by VietBank’s Shareholder Committee on April 26th 2018 and amended and supplemented on June 14th 2018.

Under VietBank’s plan, in normal conditions, the bank will increase its capital by 500 billion dong per annum in two years of 2018 and 2019 and by one trillion dong by 2020. If the plan is implemented properly, the bank’s charter capital will reach 5.3 trillion dong.

Regarding listing, VietBank said that in the short term, the bank will increase charter capital and register for trading on the Unlisted Public Company Market (UPCoM) and will list shares on the HCM City Stock Exchange (HoSE) by 2020 at the latest. Meanwhile, NamABank made announcement on closing the list of shareholders to register shares on the UPCoM before listing on the HoSE. Accordingly, after October 22nd, the procedures for the transfer of NamABank will temporarily be stopped to prepare for the registration of shares on the UPCoM. On October 24th, NamABank finalised the shareholder list to put its shares on the UPCoM.

Meanwhile, some banks such as Viet A Commercial Joint Stock Bank (VietABank), VietBank, Saigon Commercial Joint Stock Bank for Industry and Trade (Saigonbank), etc. have not registered for trading on the UPCoM.

According to Circular 180/2015/TT-BTC dated November 13th 2015 of the Ministry of Finance which guides the registration of shares, public companies having shares unlisted on the stock exchange must register for share trading on the UPCoM no later than December 31st 2016.

In the past two years, as directed by the prime minister, all banks must list shares on the stock exchange in order to enhance transparency in share trading as well in financial statements. The SBV and the State Securities Commission have repeatedly issued official documents reminding banks about this policy.

Meanwhile, instead of being listed on the UPCoM, some banks such as Tien Phong Commercial Joint Stock Bank (TPBank) and HCM City Development Commercial Joint Stock Bank (HDBank) have consulted shareholders about early listing shares on the official stock exchanges which are HoSE or Hanoi Stock Exchange (HNX).

Andy Ho, Managing director of Vina Capital said that the plan to list shares directly on the official stock exchanges is a good move which has impact on bank shares. However, the actual implementation depends on market developments, because the listing needs to wait for appropriate time in order to increase the stock liquidity.

 


Category: Finance, Vietnam

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