MBB adds choice to investors’ shopping list

Military Bank will trade 730 million shares (trading code MBB) on Ho Chi Minh Stock Exchange on November 1 with an initial price of VND13,800 per share. Analysts contacted by VIR said the starting price set for Military Bank’s debut was reasonable compared with its listed peers and given the stock market's doldrums “Military Bank has better assets quality than banks of similar scale.

Its non-performing loan ratio (NPL) is 1.66 per cent, while the figure for the whole banking system is 3.1 per cent based on Vietnam's accounting standards. Its capital adequacy ratio (CAR) is 11.6 per cent, higher than the 9 per cent minimum figure that the central bank requires,” said Nguyen Tuan, an analyst at StoxPlus, a financial information service firm.

Despite a rocky local economy, Military Bank still had good financial health. In comparison with eight listed banks, during 2007-2010 Military Bank had the highest annual growth rate in loans and deposits, chartered capital and total income, according to Thang Long Securities.

The bank’s net interest income grew 77.12 per year on average during the period, higher than ACB’s 47 per cent, Sacombank’s 50 per cent and Eximbank’s 61.5 per cent. Its earnings after tax during 2007-2010 grew 52.54 per cent per year while the figures for ACB, Sacombank and Eximbank were 9.9 per cent, 11.7 per cent and 57.6 per cent, respectively.

Military Bank plans to raise its chartered capital from VND7,300 billion ($353 million) to VND10,000 billion by the end of this year which will bring its CAR to 12 per cent. Mirae Asset Securities Vietnam research head Le Quang Minh said the bank's loan to deposit ratio for the first half this year at 73 per cent was a good figure. “The remaining mobilised capital is used for interbank activities, helping the bank actively regulate its capital,” he said.

However, analysts highlighted the bad debt at Thang Long Securities, a member company of Military Bank, as a black spot on its financial picture. Military Bank vice chairman Le Van Be said Thang Long Securities’ outstanding loans were VND1,430 billion ($69 million) which is expected to drop to VND1,000 billion by the end of this year. Of which, the bad debt by October 27 this year was around VND253 billion ($14 million).

So far, the local stock markets have accommodated Vietcombank, VietinBank, Sacombank, Eximbank, ACB, SH Bank, Nam Viet Bank and Habubank shares.