Banks plan to attract foreign capital

March 05, 2021 | 14:35
(0) user say
A number of banks continue planning to raise capital this year to improve their financial capacity and many have already deployed plans to attract more foreign capital.
banks plan to attract foreign capital
While many Vietnamese banks have foreign shareholders, there still remains ample room for foreign ownership

The shareholders of Viet Capital Bank have approved the plan to issue additional shares of up to a maximum of VND1 trillion ($43.5 million) in the first quarter.

At the same time, the bank has just closed the list of shareholders whose written opinions will be requested on the plan to set the maximum foreign ownership limit at 30 per cent to attract additional foreign capital while improving financial capacity and competitiveness.

Nam A Bank is implementing a plan to increase its charter capital to VND7 trillion ($304.35 million), including a plan to issue 57 million shares, equivalent to VND570 billion ($24.8 million), to pay dividends at the rate of 12.4878 per cent and offer for sale 143 million individual shares, equivalent to VND1.43 trillion ($62.17 million).

In addition, the bank is also completing the application to list shares on the Ho Chi Minh City Stock Exchange (HSX), instead of trading on the UpCom where it is traded at around VND14,200 (62 US cents).

Orient Commercial Bank (OCB) said that the bank plans to sell another 10 per cent of its shares to foreign investors after completing the deal to sell a 15 per cent to Aozora Bank from Japan in June 2020.

Sacombank (SCB) also said that they continue to improve their financial capacity and competitiveness. Accordingly, the bank has submitted to an extraordinary general meeting a plan to increase charter capital by VND5 trillion ($217.4 million) at the end of 2020. The move has increased its charter capital from VND15.23 trillion to VND20.23 trillion ($662.17-879.57 million).

Previously, Sacombank also announced that it was negotiating with foreign strategic partners to sell part of its capital in order to improve its financial potential after completing the restructuring and listing on the stock exchange.

According to the provisions of Decree No.01/2014/ND-CP, the ownership ratio of a foreign strategic investor must not exceed 20 per cent of the charter capital of a Vietnamese credit institution, and the total share ownership ratio of foreign investors in a domestic credit institution must not exceed 30 per cent of capital.

Currently, many Vietnamese banks are looking to fill up their foreign ownership rooms. At restructuring banks or the three zero-dong banks, foreign partners can buy 100 per cent of the capital with the consent of the government.

On the other hand, according to the EU-Vietnam Free Trade Agreement (EVFTA), European banks will be able to increase their shareholding rate in two Vietnamese banks to up to 49 per cent without waiting for a decision to increase the foreign ownership limit. This commitment does not apply to the four state-run banks of BIDV, VietinBank, Vietcombank, and Agribank.

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional