Vietcombank’s $15 million back-to-back divestments

In late October, the State Securities Commission of Vietnam (SSC) issued the share-selling licence to Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) which permitted the bank to divest a bulky estimation of 19.8 million shares from Saigon Bank for Industry and Trade, Saigonbank and Cement Finance Company (CFC).

On November 20, the bank (under ticker VCB) withdrew 13.2 million shares (4.3 per cent stake) from Saigonbank at the base price of VND12,550 ($0.55) and 6.67 million shares (10.9 per cent stake) from CFC at the base price of VND11,549 ($0.51).

Vietcombank earned $15 million from divesting Saigonbank and CFC

Regarding the participants of the Saigonbank share transaction, 20 investors (19 individual investors and one corporate investor bought 53.8 million shares, which roughly quadrupled the initial offered volume.

The bid price was VND20,100 ($0.88) and the ask price was VND12,550 ($0.55) per share. At the end, VCB earned over VND266.3 billion ($11.7 million) which exceeded the initial estimated earnings by VND100 billion ($4.4 million).

Regarding the purchasers of the CFC share sale, nine individual investors acquired 6.67 million shares, which exceeded the initial offered amount by a single per cent. The bid price was VND11,560 ($0.51) and the ask price was 11,550 ($0.51) per share. Via the transaction, VCB gained a total VND76.2 billion ($3.3 million).

After finishing the transaction, Vietcombank was estimated to have made a total of $15 million on the two divestments.

Previously, Nghiem Xuan Thanh, Vietcombank’s chairman of the board of directors, noted the bank would proceed with the divestment of Saigonbank, CFC, and Orient Joint Stock Commercial Bank (OCB) as part of the bank’s end-of-the-year plan.

He also highlighted that VCB expected to divest a total of VND300 billion ($13.2 million) from the three aforementioned financial institutions with no sign of financial loss by the end of 2017.

Thanh added the bank had planned to divest an estimated VND1 trillion ($44 million) in Military Commercial Joint Stock Bank (MB) and Vietnam Export-Import Commercial Joint Stock Bank (Eximbank) in January, 2018.

Vietcombank has earned a solid standing in the financial intermediary environment of Vietnam by leading the country in terms of profitability and being the 48^th most profitable financial institution in Asia.

CFC is a Vietnam-based financial institution, specialising in mobilising funds in the money and capital market, investing, and trading on the money, bonds, and securities markets as well as providing funds with foreign exchange and other financial advisory services. CFC was founded in 2008 with the initial charter capital of VND300 billion.

Saigon Bank was one of the first commercial joint-stock banks, founded in Vietnam in 1987 with an initial charter capital of VND650 million, specialising in serving a great pool of clients ranging from individuals, joint ventures, enterprises in industrial processing zones on the basis of its high-tech banking platform.