Vietcombank looking to stage $260 million bond issuance

Positive growth in the 2019 fiscal year helped Vietcombank draw investors on board

Joint Stock Commercial Bank for Foreign Trade of Vietnam, commonly referred to as Vietcombank (VCB), will float a VND6 trillion ($260.87 million) bond issuance in 2020. According to its announcement, the bank will sell 60 million 5-year bonds at the price of VND100,000 ($4.35) per unit.

Accordingly, the bonds offer investors the highest interest rate of 5.4 per cent per annum. Investors will be paid interest annually and the bank will repay it in full on maturity or mandatory redemption.

These bonds are non-convertible, without an asset-backed policy and are not subordinated debt.

The bank said the purpose of the issuance is to bolster its operating capital, as well as VND-denominated loans in the bank’s medium- and long- term projects. Additionally, the issue will help the bank follow safety norms from the State Bank of Vietnam and expand its financial capacity.

For the 2019 fiscal year, the number of bills and bonds that Vietcombank held was worth VND21.383 billion ($929,700). The consolidated pre-tax profit was VND23 trillion ($1 billion), 115.8 per cent of the annual target. Compared to the prior year, Vietcombank’s total assets were up VND150 trillion ($6.5 billion) or 14 per cent to reach beyond VND1.22 quadrillion ($53 billion). The number includes VND735 trillion ($31.96 billion) of customer loans and VND928 million ($40,350) of deposits from customers, up 16.3 and 15.8 per cent, respectively.

Furthermore, Vietcombank made a mark as one of the banks in Vietnam to reap billion-dollar profit last year. The bank's financial statement reported earnings before interest and tax of VND23.12 billion ($1 million), up 27 per cent. Net after-tax profit was VND18.526 trillion ($805.5 million), which ascended by VND4 trillion ($173.9 million), or 26.7 per cent, compared to the same time last year.