After M&A, most banks still left room open for foreign investors. Many banks said they would consider selling stakes to foreign investors after completing the restructuring process.
In the context that banking operations are prospering, promoting the wave to list on the stock exchange and bank stocks are gradually returning to the golden age, the foreign room story at banks is being concerned by investors, especially foreign financial corporations. Among banks that have foreign room unchanged, there are banks that carried out M&A such as SCB, Sacombank, SHB, Maritime Bank, etc.
CEO of SCB, Vo Tan Hoang Van, said after the restructuring process, the bank’s financial situation is remarkably improved as it accelerated bad debt settlement and cleaned the balance sheet. Though the immediate profit must be reserved to put for risk provision, SHB accumulated good finance after the restructuring process in the post-merger period. SCB’s provisioning fund reached nearly seven trillion dong. SCB will consider selling shares after the end of the restructuring period at the end of 2019.
Before merging with Sacombank, Southern Bank had foreign strategic shareholder i.e. UOB (United Overseas Bank) to hold 20 percent stake. Meanwhile, Sacombank had the strategic shareholder i.e. ANZ group to own nearly 10 percent stake, but ANZ transferred this investment to Sacombank’s major shareholder group at the beginning of 2012. After the M&A at the end of 2016, so far, Sacombank still has not been able to call for foreign capital because of having to deal with backlogs in the post M&A period.
Similarly, SHB and Maritime Bank, after merging Habubank and MekongBank, still have foreign room unchanged. Before merging with Maritime Bank, MekongBank had foreign strategic shareholder i.e. Fullerton Financials Holding (FFH), but soon broke up before the M&A deal.
The aforementioned banks said they will attract foreign capital after the end of the restructuring process in the post M&A period and after the bank’s health is improved, the sale of shares to foreign investors will be much better than today.
Vo Tan Hoang Van said SCB is negotiating with foreign strategic shareholders to sell more than 50 percent chartered capital. This bank was basically accepted to sell more than 50 percent stake to foreign investors but wanted to find suitable partners to their development strategy.
On its part, the Board of directors of SHB wants foreign strategic shareholders to be economic organisations that have long-term investment demand, clear management and governance policy, to participate in the governance and administration, support in technology and customers to ensure the bank’s stable and sustainable development. The bank will cooperate with financial groups and foreign investment funds to accelerate retail spearhead, exploit capital sources and invest in Vietnamese projects and businesses. “This strategy will set the stage for SHB to make a breakthrough in 2018 and the following years, facilitating profit and revenue growth”, said SHB leader.
Meanwhile, after selling more than 21 percent stake to foreign investors at the end of 2017 and earning more than $300 million, HDBank said it is going to open more foreign room after merging with PGBank (expected to end in August 2018). After six months listing on the bourse, the value of HDBank shares has remarkably increased, and foreign investors net purchased with the added value of six percent. The loosening of foreign room after merging PGBank will continue raising the attractiveness of HDBank shares.
According to Le Anh Tuan, Chief Economist of the Research Division of Dragon Capital Group, the reason why investors are interested in pouring capital into banks is because this is the lifeblood of the economy, banking operations are recovering. The room expansion in the banking sector is controlled by the government so it is not so worrying that foreign investors may entirely dominate this field.
