Vietcombank preparing to sell 6.5 per cent stake to Mizuho and other shareholders

The deal is expected to be completed in the first quarter of 2025, ACBS noted in a report published on July 2.

In 2019, Vietcombank issued a similar deal, and the issuance price at that time was equivalent to a trailing 12-month pre-money price-to-earnings (P/E) ratio of 16.0x and a post-money price-to-book (P/B) ratio of 2.8x. Based on the valuation of the previous deal, ACBS estimates that the issuance price this time will be around VND96,000-100,000 ($3.78-3.93) per share.

The issuance will have many positive impacts on Vietcombank’s capital adequacy ratio (CAR) as well as its credit growth potential. Specifically, the analysts expect CAR to improve by about 2 per cent once the deal is completed. As of December 31, 2023, Vietcombank’s CAR reached 11.4 per cent, which is enough to meet the minimum requirement of 8 per cent.

“Improving the tier-1 capital will help Vietcombank increase its credit supply capacity to the economy while still meeting the more stringent capital standards of Basel III in the future, while also creating room to pay cash dividends in the coming years,” the report noted.

However, with an increase of nearly 20 per cent in equity capital, Vietcombank will face pressure to maintain its fairly good profitability. It is forecast that Vietcombank’s return on equity will decrease from the current 20 per cent to 15 per cent by 2026 – equivalent to the industry average.

Vietcombank plans to hold an extraordinary shareholders’ meeting on August 19 to discuss the private placement and elect additional members to the board of directors and supervisory board.

The plan to issue 6.5 per cent of its shares via a private placement had been put forth by Vietcombank in 2019, but it has yet to be completed.

At its 2024 AGM in April, board member Do Viet Hung said such a private placement would be subject to market conditions.

“Depending on market conditions, the bank will organise a conference for local and foreign investors and shareholders. We plan to conduct the conference in 2024, and the private place is expected to take place from now and be completed in 2025,” Hung said.

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