Within just a few months, VPBank’s share price on the Over-The-Counter (OTC) market has increased dramatically from VND11,500 (roughly US$0.512) at the beginning of the year to VND34,000 (roughly $1.514) to VND 36,000 ($1.604) in July, just one month before being issued.
At this time, foreign investors also surprisingly buy massive amounts of VPBank’s shares. While foreign investors owned ...0% of VPBank at the end of 2016, the figure in the recently published prospectus is up to 22.34%.
Accordingly, within just a few months, 78 foreign investors who are institutional investors holding more than 5% of charter capital, surprisingly bought up to 314 billion of VPBank shares.
Some of them are familiar with Vietnamese financial market like Dragon Capital, a Ukraine's leading investment bank, and some of them are the new comers like GIC, a leading global investment firm and Clermont, a real estate investor. According to Director of Viet Capital Securities Joint Stock Company (VCSC) To Hai, the total amount of VPBank shares held by foreign investors is worth US$1.2 billion.
Being the leader of VCSC, VPBank’s listing and distributing consultant who got access to foreign investors buying VPBank’s shares, Hai said this situation has been unprecedented in Vietnam’s banking system, even when banks’ shares are the hottest.
The current offering price is VND39,000 (roughly US$1.737) per share, equalling to VPBank’s reference price when officially trading on Ho Chi Minh Stock Exchange on August 17.
General Director of VPBank Nguyen Duc Vinh and other members of the Board of Directors are also surprised when a foreign investor is willing to buy at the higher price, proving their confidence in VPBank’s development. Investors’ demand is four fold greater than the expected amount of offering shares, making the bank’s leader persuade existing shareholders to sell some of their shares to investors.
Vinh revealed that alongside with negotiation process, VPBank also arranged for foreign visitors to come to Vietnam, work with its Board of Directors to experience the real working process, and the environment.
Moreover, VPBank leader also straightly mentions obstacles, risks, sick doubt with clear figures. He said: “Every coin has its two sides and we discuss with our investors the barriers so that they can see that we are a transparent administration organisation.”
According to the 2016 report on the consolidated financial statements, VPBank’s return on average equity (ROAE) was up to 25.7%, much higher than that of other banks like Vietcombank (14.7%) and BIDV (14.2%).
VCSC also confidently said that VPBank has no rival on the marginal market in the world and region regarding profitability, growth and capital. From 2016 to 2018, the double-digit annual EPS (Earning Per Share) growth is predicted to be higher than most of other banks. VPBank also surpasses not only Vietnamese banks but also other regional ones concerning expected profitability. Specifically, VPBank’s Return on total Assets (ROA) was 1.9% in 2016 while the figure for other banks was just 0.8%)
The business result of banks. Source: 2016 financial reporting and audit of banks (Photo: Internet)Despite the lower total amount of asset compared to other state-owned commercial companies, VPBank operates very efficiently, with its profit being nearly equal to other big banks. Within last seven months, VPBank’s profit reached VND4,100 billion (US$182.7 million); and this year’s VND6,800 billion (US$303million) target can be achieved. VPBank’s after-tax profit for next year is over VND8,500 billion (US$378.7 million).
Nguyen Duc Vinh said that after listing its shares, VPBank would complete the final steps to issue new individual stocks, gaining VND6,000 billion (US$267.3). Accordingly, VPBank would become one of the banks having the highest owner’s equity with the figure being VND24,000 billion (US$1.07 billion).
