BIDV’s IPO is rubber-stamped

On November 30, 2011 the prime minister enacted Decision 2124/QD-TTg ratifying the BIDV equitisation scheme.

Accordingly, after being equitised, BIDV will still maintain its current state capital portion and issue more shares to hike its chartered capital, in which the state will hold more than 78 per cent stake in the first phase and at least 65 per cent stake in the second phase of the bank’s equitising plan.

BIDV shall hold its initial public offering (IPO) in December 2011’s final week. In the first phase the bank will issue shares tantamount to 22 per cent of its chartered capital currently exceeding VND28,251 billion ($1.34 billion). Of which, 3 per cent of the chartered capital will be distributed through IPO, 1 per  cent of the chartered capital sold to its employees, 3 per cent to Trade Union organisation and 15 per cent to a foreign strategic partner.  

In the second phase the bank will hike its foreign strategic partner stake to at most 20 per cent of its chartered capital and issue more shares to the public aiming at gradually scaling down state ownership to at least 65 per cent of its total chartered capital by 2015.

US-based financial consultant Morgan Stanley will help in selecting a foreign strategic partner. Over 40 financial institutions reportedly showcased interests to team up with the bank once it embarked on equitisation.

“Equitisation is a strategic move to turn BIDV into a powerful multi-field, multi-ownership finance and banking group on par with international standards with leading quality and efficiency among Vietnam-based financial organisations,” said the bank’s chairman Tran Bac Ha.

The bank also set to list on the Ho Chi Minh Stock Exchange no later than the third quarter of 2012 and sell stakes to a foreign strategic partner within 2012.

BIDV’s total assets came to VND403 trillion ($19.2 billion) as of November 30, 2011. Also by that date, the bank’s total deposit amount reached VND274 trillion ($13.04 billion), loan balances VND268 trillion ($12.76 billion) and pre-tax profits VND4.1 trillion ($195.2 million). Its capital adequacy ratio (CAR) stood at 10 per cent on par with State Bank standards.