Techcombank adjusts FOL to 8.54 per cent to approach foreign investors

The Hanoi-based lender currently holds more than 172.35 million treasury shares, accounting for 9.39 per cent of the total outstanding shares.154.87 million of these will be available to foreign investors.

In the first batch of treasury share sales, 93.24 million units will be offered at the minimum price of VND23,445 ($1.06). The sale is expected to take place in the first or second quarter of this year, after securing the approval of the State Securities Commission.

Techcombank is preparing to sell its treasury shares

Last September, following the buyback from HSBC Holdings, Techcombank (OTC:TCB) asked shareholders to lock the foreign ownership limit to nil until further notice. The recent lifting of its FOL, according to the lender, is to prepare to resell its treasury shares in line with the AGM resolution approved on March 3.

The share buyback from HSBC Holdings last year could have hurt Techcombank’s capital raising plan, prompting the lender to subsequently issue 500 million shares to existing shareholders and possibly other institutional investors to make up for the capital shortage in the last months of 2017.

In its report on Techcombank last year, Hanoi-based VPBank Securities (VPBS) said, “The treasury buyback [from HSBC] totaled up to VND4.041 trillion ($183.68 million) and could be the reason behind the virtually non-existent credit growth at the bank in the first six months of the year, as it had to prepare large amounts of money for the buyback.”

Ho Chi Minh City Securities Corporation (HSC) commented in one of its reports in 2017 that investor interest in acquiring Techcombank’s stakes is there, even as global banks like HSBC Holdings or Standard Chartered Public retreat.

“Even as established global banks, such as HSBC and perhaps also Standard Chartered, are looking to sell their stakes in local banks as they step up to meet Basel 3 requirements, other types of investors are jockeying to replace them,” the Ho Chi Minh City-based securities firm wrote.

“We understand that these range from regional banks from Japan, Korea or the ASEAN to some large private-equity-type investors from the region. There may also be interest from local investors, including some of the existing shareholders. Hence, we believe that TCB will not find it too hard to find a buyer for the treasury shares, although executing a deal may take several months.”