To bring maximum benefits to shareholders
The documents for the annual general meeting (AGM) recently announced by Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) shows that the bank will complete the transfer of registration for trading on the Unlisted Public Company Market (UPCoM) to list on the HoSE in 2020.
Talking to Dau tu Chung khoan newspaper, a senior leader of LienVietPostBank said that the listing on the HoSE aims to enhance the bank’s image and brand identity in the domestic and international investor community as well as to customers who are trading at the bank. At the same time, it is expected to improve the liquidity of the stocks, bringing maximum benefits to shareholders when the VN Index is highly representative for the Vietnam’s stock market and is often used by investment funds as a reference to measure investment efficiency.
LienVietPostBank has prepared necessary documents and procedures, and plans to list on the HoSE in the fourth quarter (Q4) of 2020. “This is the bank’s responsibility to shareholders,” said the bank’s leader.
Similarly, one of the content for the AGM of Vietnam International Commercial Joint Stock Bank (VIB) is to transfer shares from the UPCoM to the HoSE this year. This is a noticeable information because VIB shares for many years have been evaluated among highly sought-after bank stocks, but not included in the portfolio of many organisations and large funds because VIB stocks are still traded on the UPCoM.
In fact, the change of stock-exchange floor has been mentioned by VIB since 2019, but not been implemented yet for many reasons. According to the VIB’s documents for the AGM, the bank’s Board of directors (BOD) is authorised to decide the listing time after completing the capital raising by issuing bonus shares.
To promote banks’ image to strategic investors
At the AGM of Saigon Hanoi Commercial Joint Stock Bank (SHB), shareholders approved the plan to switch the listing from HNX to HoSE. At the same time, shareholders authorised the bank’s BOD members to decide the time of changing the floor, the selection of consultancy unit, the ownership ratio of foreign investors/ appropriate charter capital in accordance with the actual situation, ensuring the legitimate interests of SHB and shareholders. The bank’s BOD will complete all documents and procedures related to these contents in line with the current law.
It is known that SHB shares have been traded on the HNX since 2007 and up to now, they are always among the group of stocks with the highest market capitalisation and liquidity on the stock exchange.
SHB decided to change the listing to HoSE because the bank wants to promote its image to foreign strategic investors and connect to international markets through strategic investors themselves, thereby enhancing SHB’s position in the market.
In addition, this is considered a strategic and proactive move to carry out the prime minister’s policy to restructure the stock market of Vietnam.
At the AGM of Asia Commercial Joint Stock Bank (ACB), shareholders also approved the plan to list on HoSE. The AGM’s document clearly stated that considering ACB’s position as one of the leading banks in market capitalisation, the transfer of stock exchange may bring many benefits. For example, ACB shares are likely to be put into important index baskets of HoSE with significant proportion such as VN30 (about four percent), VN Diamond (10%), VNFIN Select (12%) and VNFIN Lead (12%), etc.
ACB’s BOD said that this is the time to actively change the listing of shares because it can help increase market value and bring more benefits to shareholders.
In fact, many banks actively switch trading floors from HNX, UPCoM to HoSE not only to increase benefits for shareholders, improve stock liquidity as well as images, brands, etc. but also to welcome the policy when the prime minister has approved the establishment of the Vietnam Stock Exchange on the basis of rearrangement of HNX and HoSE.
Accordingly, from 2020 to 2023, it is expected that the stock market will be managed by the HCM City Stock Exchange (HoSE), while the bonds and derivatives market will be managed by the Hanoi Stock Exchange (HNX). Thus, it is only a matter of time for banks to change listing to the HoSE.
Talking about the roadmap of trading floor transfer, general director of SCB Do Minh Toan said that the bank will distribute dividends to increase charter capital first, then change the trading floor. The dividend payment is targeted to be implemented in September and the trading floor transfer is scheduled in November and December. This plan is a subjective desire of the bank’s Management Board and is expected to be completed this year.
To be ready to do big business
Talking to Dau tu Chung khoan, general director of a private joint stock bank said that since the regulations on information disclosure and trading on the UPCoM are not strict, banks’ change of listing to the HoSE is a positive sign, showing that banks are ready to do big business.
In fact, Vietnamese banks are betting bigger and bigger with 19 commercial banks in the Top 500 largest and most powerful banks in Asia Pacific and one bank in the Top 200 largest banks in the region in Strength Rank, as announced by Asian Banker magazine in 2019.
This is also reflected in the rising scale of the system of credit institutions (CIs). By the end of March 2020, the total assets of the system were 12,480 trillion dong, up by 46.8 percent compared to the end of June 2016.
In addition, the financial capacity of CIs has been strengthened, charter capital has been raised over the years, while the governance quality has been step by step enhanced to be in line with international practices.
By the end of March 2020, the charter capital of the CI system reached 617.500 trillion dong, up by 26.4%; while the equity was 937.900 trillion dong, up by 57.67 percent compared to the end of 2016.
The implementation of Basel II standards continues to be focused in order to meet international practices in terms of capital safety.
To date, 76 CIs (two state-owned banks, 20 private joint stock banks, two joint venture banks, nine100 percent foreign-owned banks, and 43 foreign bank branches) have applied their capital safety ratio in accordance with Circular 41/2016/TT-NHNN.
Governor of the SBV Le Minh Hung said that, CIs are more aware and pay more attention to risk management and transparency in credit activities. Accordingly, CIs have focused on reviewing, updating and completing the internal regulation system on professional fields, and setting up apparatus for risk inspection, supervision and management; improved the supervisory efficiency of the BOD, Management Board on banks’ activities as well as separating the management function of the BOD from the management of the Management Board; established a transparent and clear decentralisation and authorisation mechanism to avoid conflicts of interest, etc.
