Through a private placement, BIDV will be issuing 603,302,706 shares, equivalent to 15 per cent of its charter capital to Korea’s KEB Hana Bank, raising its chartered capital to VND40.22 trillion ($1.74 trillion
According to the Hanoi-based lender, the deal is valued at over VND20.29 trillion ($882.39 million). A share issued to the Korean bank will therefore be VND33,640 ($1.46) apiece.
A share of BIDV (HSX: BID) closed the day at VND35,750 ($1.55) apiece, up 2.44 per cent from the closing session last week.
BIDV and KEB Hana Bank will now carrying out necessary procedures in accordance with regulations in both countries in a bid to conclude the transaction as soon as possible.
BIDV’s confirmation of the private placement to KEB Hana Bank, a subsidiary of Hana Financial Group (HFG), has now ended the lengthy process that both parties have taken over the past two years to negotiate the share prices and get the central bank’s approval.
BIDV is Vietnam’s largest lender in terms of assets and 95.28 per cent of its stakes are currently owned by the state. While the other state-owned banks like Vietcombank and VietinBank have managed to find their foreign strategic shareholders for quite some time, BIDV was struggling to find one over the years. Seeking for a foreign strategic shareholder is said to be a solution to help local banks enhance their finances and strengthen their capital adequacy ratio in line with the Basel II requirements.
BIDV’s foreign ownership limit (FOL) is set at 30 per cent and the bank does not have any strategic foreign shareholders on board at the moment.
Following the divestment, the state holdings at BIDV will be reduced to 80.99 per cent, with KEB Hana becoming the bank’s only foreign strategic shareholder.
According to BIDV’s consolidated financial statement for the first quarter, its net interest income was at VND8.54 trillion ($371.52 million), a fall of some 7 per cent on-year. Its post-tax profit reached VND2.02 trillion ($88 million), a slight increase of 0.15 per cent.
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