Foreign capital attraction is still the target of many banks this year, but the development is somewhat different when banks no longer seek for strategic investors.
At LienVietPostBank’s 2018 annual general meeting (AGM) held in the middle of last week, Dang Khac Vy, Chair of the Board said the bank is discussing with five foreign investors based in the U.S, EU and Japan about the sale of Treasury shares.
“We see that the current moment is favourable for the sale of Treasury shares. Some foreign banks and a large number of investment funds are considering Vietnam as their destination. They are really interested in investing in the country”, said Vy.
On the side-lines of the meeting, Nguyen Duc Huong, former Chair of LienVietPostBank said “A Norwegian investment fund has studied and really wants to purchase LienVietPostBank’s shares at more than 30,000 dong each but the management board has not made a decision”.
In the middle of March, at its AGM, VPBank leaders also announced the separate issuance plan with the total number of shares equivalent to 15 percent of the bank’s common stocks recorded at the time of the meeting to both domestic and foreign investors. Specifically, as of December 31, 2017, VPBank reported 1.57 outstanding shares, including 1.497 trillion dong common stocks.
Attracting foreign strategic investors is no longer the trend of banks now. According to Dr Nguyen Tri Hieu, an economic expert, this is not difficult to understand when over the last period, strategic investors have continuously divested from banks.
Most recently, at the beginning of 2018, the foreign shareholder BNP Paribas divested its entire stake from OCB. However, information about the transferee of more than 74 million BNP Baribas’s shares has not been announced. BNP Paribas is the strategic investor with 10 percent stake in OCB since 2007 and the investor has gradually increased its ownership rate to 20 percent of the chartered capital since 2011.
Also at the beginning of this year, Standard Chartered Bank terminated its role as the strategic investor after more than 12 years investing in ACB.
Specifically, Vietnam Securities Depository Centre announced that the two major shareholders of ACB including Standard Chartered APR Limited and Standard Chartered Bank (Hongkong) Limited transferred the entire 154 million shares to other investors.
In 2017, the market also witnessed HSCB’s divestment from Techcombank after nearly 12 years Earlier, ANZ divested from Sacombank in 2012.
Dr Hieu said “Investment funds are financed primarily by small investors. These funds do not involve in operation but just invest to seek for profits. Vietnam’s overall economic trend is reflected by macroeconomic indicators so it is attractive to foreign investors. And, the reality shows that foreign investors are the major buyers of shares in Vietnam stock market over the last period”.
Techcombank has just announced the Resolution of the management board on implementation of the sale of Treasury shares to domestic/foreign investors, phase 2.
Accordingly, the entire 64,411,157 treasury shares (accounting for 5.58 percent of outstanding shares) will be sold. These are the remaining Treasury shares after having deducted the treasury shares sold to employees under Employee Stock Ownership Programme (ESOP) and the Treasury shares sold to investors in phase 1.
Right at the beginning of March, Techcombank announced the investment of more than $370 million (equal to about 8.4 trillion dong) from two independent legal investors managed by Warburg Pincus the world leading Fund Management Company which specialises in investing in companies having long-term investment potential.
According to Techcombank, this transaction will provide capital to help the bank realise its expected growth targets and continue consolidating the leading bank position in Vietnam, while raising the total committed investment by companies managed by Warburg Pincus in Vietnam to more than $1 billion.
The trend of foreign capital flowing into Vietnam with the purpose of mere financial investment can also be clearly seen in the last months of 2017, in which 76 foreign investors including investment funds and foreign banks such as Credit Saison (Japan), Deutsche Bank AG (Germany), JP Morgan Vietnam Opportunities Fund, CAM Bank (Japan), Dragon Capital, VinaCapital, Macquarie Bank (Australia), PYN Elite, etc. spent $300 million, equal to more than 6.8 trillion dong on purchasing shares of HDBank, in which, each investor owns no more than three percent in this bank.
