Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDVstock code BID) just announced the results of the first public offering of bonds in 2019.
Particularly, BIDV redistributed two bonds with the same par value of 10,000 dong per bond including 249,932 bonds maturing in 2026 and 50,000 bonds maturing in 2029. The total successful offering value was nearly 3 trillion dong.
Previously, at the end of August 2019, the bank registered to offer 300,000 bonds including 250,000 seven-year bonds, maturing in 2026 and 50,000 10-year bonds and maturing in 2029.
These were all non-convertible bonds, not accompanied with warrants, no guarantees, and satisfying the conditions to be included in the bank’s tier two capital according to the current regulations, with the par value of 10 million dong per bond, and the floating rate based on the interest rates of four state-owned commercial banks.
Thus, with the above issuance results, BIDV added nearly 3 trillion dong to supplement tier two capital to meet the demand for dong loans in 2019 for medium and long-term projects.
Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Vietnam Bank for Agriculture and Rural Development (Agribank), and BIDV were pondering on the too-low charter capital, not meeting the minimum capital adequacy ratio (CAR) compared to basel two standards, especially when expanding credit.
Therefore, at the end of July, BIDV also closed the transactions documents with foreign strategic investors. Specifically, BIDV would issue privately to partner Korean Exchange Bank (KEB Hana Bank) an amount of 603,302,706 shares, corresponding to the rate of 15 percent of BIDV’s charter capital after investing. The total value of the transaction was 20.29510302984 trillion dong.
After issuance to the partner above, the State-owned capital would reduce to over 80 percent of the charter capital from the current level of 95.28 percent.
According to a BIDV leader, KEB Hana Bank would contribute to BIDV in the retail product segment, develop the Digital Banking system and manage risk by modern standards.
The leader also added that it was only the first step in the above-mentioned purchase. There were many procedures and time to complete.
