A series of bank share sales are being negotiated and at least three deals can be finalised in the first half of this year. Information about the deals will be more or less revealed at the annual general meeting of banks that are happening widely.
*Many “huge” deals have appeared
Among more than ten banks that have planned to organise the annual general meeting from now till the end of April 2018, half of them are negotiating or have almost completed the plan to sell shares to foreign partners.
At the end of this week (April 21), BIDV, Vietinbank and PGBank will simultaneously organise the annual general meeting (AGM) 2018. The common point of these three banks that shareholders are waiting for is information about M&A deals.
In spite of not cooperating with PGBank, Vietinbank is difficult to avoid the merger if it wants to quickly raise capital to meet the standards of Basel II. Currently, the bank’s Capital Adequacy Ratio (CAR) has almost bottomed up, while the room to carry out other capital raising methods is not much.
For PGBank, despite the failure in the M&A deal with Vietinbank, it is likely that this bank has to solve M&A method in this year. Initially, MB has just admitted to study PG Bank. However, according to the source of Bao Dau Tu, many partners are interested in PGBank, including foreign investors.
However, the biggest deal that the market expects comes from BIDV. Currently, BIDV is the only joint stock commercial bank that still has foreign room remaining unchanged and the state ownership rate still accounts for more than 95%. This bank’s share price has doubled from September 2017.
Though BIDV has not revealed any information, according to the confirmation of Le Viet Dung, deputy Head of the National Committee for Financial Supervisory (the National Financial Supervisory Commission), South Korean’s KEB Hana Bank is about to purchase BIDV shares. It is more likely that KEB Hana will purchase 15 percent stake of BIDV.
Meanwhile, two other banks will organise the AGM at the beginning of next week, followed by NCB and VCB. These banks are urgently negotiating with foreign strategic partners and target to finalise the deals before June 30, 2018.
According to Nghiem Xuan Thanh, Chair of VCB, the bank’s separate issuance plan of 10 percent stake to foreign partners was adopted by the government.
On its part, according to NCB, among foreign investors that study NCB, this bank enlisted three potential partners. The bank’s target is to finalise one among these three partners before June 30, 2018 to review and negotiate conditions to become strategic shareholders.
*Foreign investors seek IPO of Vietnamese banks
Not just entering Vietnam market by M&A or becoming strategic shareholder, many foreign funds have recently sought shares of Vietnamese banks through IPOs and other capital offering deals.
According to information of Bao Dau Tu, GIC and Dragon Capital are negotiating to own Techcombank shares in the upcoming IPO. Similarly, though the remaining ownership room of foreign capital is not much, TPBank shares are also being eyed by many foreign investors. Earlier, tens of foreign investors have raced to purchase VPBank and HDBank shares in these banks’ issuances.
According to experts, profits of the golden age have returned, bad debt is handled satisfactorily, Vietnamese stock market is booming, etc. are making shares of Vietnamese banks become attractive in the eyes of foreign investors. IPOs and offerings of Vietnamese banks over the last period have attracted a large number of foreign investors, with the registered purchase to be many times higher than the offering, thereby buying price is also high.
Most foreign investors who are interested in the offering of Vietnamese banks are “shark investors” such as GIC, Dragon Capital, VinaCapital, Deutsche Bank AG, Deccan, JPMorgan Vietnam Opportunities Fund, CAM Bank, Clermont, Charlemagne, PYN Elite, etc.
Recommending investors about the way to participate in Vietnam financial market, representative of Lee & Ko Law Firm (South Korea) said Vietnam financial market is quite potential while the application for license to establish a bank is very difficult.
Therefore, purchasing shares or acquiring 100 percent stake in ailing banks is the best opportunities for investors.
Commenting on foreign investment wave into banking sector, Dr Can Van Luc, economic expert said Vietnamese banking sector now is getting much better than the previous time, so the fact that foreign investors are interested in is understandable.
In another perspective, domestic banks themselves cannot afford to raise capital as before because since 2018, a series of new regulations of the State Bank have come into effective.
Accordingly, many CAR targets are tightened, and the cash flow to purchase bank shares is also monitored, to ensure the money used to purchase bank shares is real.
