SHB temporarily locks foreign ownership ratio at 10 per cent

August 12, 2021 | 20:23
Saigon-Hanoi Commercial Joint Stock Bank (SHB) confirmed that it would temporarily lock its foreign ownership ratio at 10 per cent, and is now negotiating with several foreign investors.
SHB temporarily locks foreign ownership ratio at 10 per cent

As a result of locking its foreign ownership limit (FOL) from the previous 20 per cent, SHB could execute its plan of offering and issuing additional shares, which was approved by its board at the Annual General Meeting of Shareholders in April.

The rules of the State Securities Comission stipulate that the FOL cannot be locked for longer than six months. At the end of this time limit or in case the bank completes the issuance or offering to foreign investors at an earlier time, the bank will have to coordinate with the Vietnam Depositary Centre to adjust the ratio.

Previously, the bank approved paying stock dividends in 2019 and 2020 at the rate of 10 and 10.5 per cent, respectively.

If these plans are completed, the bank's charter capital will increase significantly to more than VND26.6trillion ($1.16 billion).

Do Quang Hien, chairman of the Board of Directors at SHB, revealed that there are a number of international financial groups, banks and investment funds expressing their interest to become strategic investors of SHB.

Furthermore, the bank’s shareholders also approved a plan to increase capital by VND5 trillion ($217.4 million) from the issuance of shares for foreign investors and foreign strategic investors.

Besides strengthening its foundation, SHB targets forging stronger connections with international stakeholders and tap into a more vibrant ecosystem.

Earlier this month, Nguyen Van Le, former general director of the bank, resigned after 21 years of working, citing poor health.

According to local media, SHB is currently in the final rounds of negotiations to choose a foreign partner from a line-up including high-profile names from the US, Singapore, and South Korea that are looking to collaborate with SHB and develop its retail and digital banking services. SHB is also selling its shares in two overseas subsidiaries, SHB Laos and SHB Cambodia.

The bank now aims to find a potential suitor to sell a part of its ownership in consumer finance company SHB Finance.

Given its solid growth foundation, SHB wants to partner up with foreign investors to diversify its sources and enhance its operation to be in line with international standards.

Currently, SHB is working with 2-3 partners to sell capital at SHB Finance, and the deal is almost completed. The bank will publicly announce the final results to its shareholders.

By Tri Lam

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