Vietcombank sells shares worth $265 million to GIC, Mizuho Bank

By Tran Anh - Jan 09, 2019 | 07:29 AM GMT+7

TheLEADERThe average offering price is estimated at $2.5 per share and the attainable capital will help Vietcombank maintain growth in next years.

According to Viet Dragon Securities Corporation (VDSC), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) has successfully sold nearly 108 million of new shares worth $265 million to Government of Singapore Investment Corporation (GIC) and Japan’s Mizuho Bank.

That means the average offering price is estimated at VND57,000 - 57,500 per share, equivalent to $2.45 - $2.47 that is higher than trading price on the market, currently at VND54,000 per share.

Under the deal, GIC is expected to hold a 2.5 per cent stake and Mizuho Bank, Vietcombank’s largest current foreign investor, maintains its holding of 15 per cent.

Additional capital will support Vietcombank's core activities and help it maintain growth in 2019-2020.

According to VDSC, Vietcombank's credit growth is estimated at 14.5 per cent in 2018, higher than the average of 14 per cent. Non-performing loan ratio (NPL) decreased to below one per cent.

Although credit growth was only 14.5 per cent, net interest income was estimated to increase by 26 per cent over the same period, thanks to its active retail lending in recent years.

The service segment is also a bright spot of Vietcombank when the income growth is over 30 per cent over the same period, mainly from the increase in fees and commissions.

Besides, 2018 also saw Vietcombank divest successfully from Military Bank, Eximbank and Saigon Bank to meet regulations on holding below five per cent ownership at other credit institutions.

Vietcombank earlier planned to issue 360 million more shares, equivalent to 10 per cent of its current charter capital, in the upcoming private placement transaction, according to DealStreetAsia. The bank is Vietnam’s fourth biggest company by market capitalisation (around $8.6 billion).