VNPT’s third attempt to divest Maritime Bank coming up

December 22, 2017 | 15:54
Vietnam Post and Telecommunications Group (VNPT) is auctioning 71,577,141 million Maritime Bank (MSB) shares in a single-batch sale on January 18 on the Hanoi Stock Exchange (HNX).

At the starting price of VND11,900 ($0.54) apiece, the total value of the sale is expected at VND851 billion ($38.68 million).

Investors eligible for bidding must satisfy the requirements of being of sound financial capacity and making a long-term commitment to provide financial support and retaining the current employees.

Earlier, VNPT made two attempts to sell its holdings at the Hanoi-based lender, both times failing to find buyers.

In the first nine months through September, MSB’s total revenue reached VND8.631 trillion ($392.31 million), up 27 per cent on-year. Revenue from services accounted for VND225 billion ($10.22 million) of the total, an increase of 27 per cent on-year.

Pre-tax profit was reported to rise 207 per cent on-year to VND589 billion ($26.77 million). The lender posted its total assets at VND104.31 trillion ($4.72 billion), with chartered capital at VND11.75 trillion ($534 million).

VNPT seeks to divest of Maritime Bank

In a press release dated December 15, Moody’s Investors Service has affirmed MSB’s local and foreign-currency bank deposits and issuer ratings at B3/Not Prime. At the same time, Moody’s has affirmed the bank's BCA and Adjusted BCA at caa1. The credit rating agency has also affirmed MSB’s counterparty risk assessment (CRA) of B2(cr)/Not Prime(cr). The rating outlook remains positive.

In its ratings rationale, Moody’s noted that the affirmation of the caa1 BCA reflects the elevated risks in MSB’s balance sheet, namely its large share of assets that Moody’s considers problematic.

As of the end of September 2017, the bank’s problem loan ratio was among the highest of the Vietnamese banks rated by Moody’s. Moody’s defines problem loans as loans in the categories 2-5 under Vietnamese accounting standards and gross bonds issued by Vietnam Asset Management Company (VAMC).

Profitability remains constrained due to the bank’s high share of low yielding assets in its balance sheet, coupled with very high credit costs. On balance, the BCA also considers MSB’s high capital levels and sound liquidity position.

The positive outlook on the supported ratings reflects the bank's committed and ongoing efforts to resolve its legacy problem assets, which should lead to improved asset quality and profitability metrics. Given the large size and concentrated nature of these legacy accounts, and the bank's positive expectations around recoveries, this could lead to meaningful improvements in asset quality in 2018. Material recoveries of impaired assets could significantly improve the bank's solvency profile.

The “moderate public support” assumption for MSB is based on the bank's modest 1 per cent share of system deposits at year-end 2016, as well as a history of regulatory forbearance in Vietnam. This resulted in its caa1 BCA rating increasing a notch to B3.

By By Minh Trang

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