Plans to bring bank stocks to the stock market were being restarted in many banks.
However, the plan was still on paper.
According to the project ‘Restructuring the stock market and insurance market until 2020 and orientation to 2025′, by the end of this year, all commercial banks would have to list and register for stock transactions. The official market included Hochiminh Stock Exchange (HOSE), Hanoi Stock Exchange (HNX), Unlisted Public Company Market (UPCoM).
However, until then, only 18 out of 31 banks had implemented, including 10 banks on HoSE, three banks on HNX and five banks on UPCoM.
Earlier, in 2019, nearly a dozen banks submitted to shareholders plans to list on HoSE, HNX or register for transactions on UPCoM. However, until the end of the year, the only member who could successfully list on the floor was Vietnam Thuong Tin Commercial Joint Stock Bank (Vietbank). The remaining members were still unavailable for many reasons.
Orient Commercial Joint Stock Bank (OCB) was an example. The bank had planned to go on the HoSE since 2018. Bank leaders expected that the market capitalisation would reach $1 billion after listing. However, two years had passed, until the present time, the listing was still in the plan and continued to be submitted to shareholders in the Annual general Meeting of Shareholders in 2020. Explaining the continuous late appointment, the bank leaders said that it was due to unfavourable stock market conditions.
Similarly, Nam A Commercial Joint Stock Bank (Nam A Bank) had also closed the list of shareholders preparing to go to UPCoM from the end of October 2018. However, shortly after that, the Board of directors had signed a notice to send shareholders about the change of list closing date. Nam A Bank representative said the bank would announce the closing date of the list of new shareholders to shareholders in the shortest time.
At the 2019 annual shareholder meeting, there was a plan to continue to be listed by the Board of directors of Nam A Bank. Tran Ngoc Tam, general director of the bank, also affirmed to list shares on the official stock exchange and sell shares to foreign investors in 2019. However, according to documents submitted to shareholders at the 2020 Annual general Meeting of Shareholders, the listing deadline would continue to be extended to the end of the year.
An Binh Commercial Joint Stock Bank (ABBank) also expected that after paying 7.4 percent of dividends, it would apply to HoSE in 2019. By July 2019, the stock dividend payment had been completed. However, there had not yet been any information about the procedure to list on the floor until the end of the year.
At Vietnam Maritime Joint Stock Commercial Bank (MSB), although the application for listing shares on HoSE had been completed since the end of November last year, by the end of May this year, the bank’s Board of directors suddenly decided to postpone that plan.
The reason given was the worry that MSB’s share price would be priced lower than its intrinsic value and not attracting investors’ attention due to the impact of the Covid-19 pandemic.
Rebooting, would the history repeat?
As mentioned above, 2020 was the deadline for banks to list on the stock exchange under the direction of regulatory agencies. Accordingly, the listing plan was being restarted in many banks.
Nguyen Dinh Tung, CEO of OCB, said that in 2020, the bank would be listed, but it might occur at the end of Q3-Q4/2020 when the stock market was more favourable. Previously, the bank would close the sale rate to foreign investors.
Reportedly, in mid-March, OCB was approved by the State Bank of Vietnam (SBV) to sell 11 percent of its capital to Aozora Bank, the chartered capital increased to more than 8.767 trillion dong, from 7.899 trillion dong.
Meanwhile, at the recent Annual general Meeting of Shareholders in 2020, the leader of ABBank said that due to the relocation of its headquarters from Hochiminh City to Hanoi under the resolution of the 2019 general Meeting of Shareholders, the bank was forced to postpone listing.
It was expected that after completing the legal procedures for business registration in Hanoi, ABBank would submit depository and listing documents. At the same time, the listing might ensure the best interests for shareholders.
In case the listing could not be done in 2020, ABBank would complete the centralised depository registration of shares at the Vietnam Securities Depository (VSD) and register the transactions on UPcoM according to the required roadmap of SBV in Official Dispatch No. 1222/NHNN-TTGSNH dated February 27, 2020, based on the Stock Market Restructuring Scheme issued under Decision No. 242/ QD-TTg dated February 28, 2019, of the prime minister, affirmed the bank’s leader.
As for NamABank, many objective factors had hindered the listing progress in the past time. However, the bank’s Board of directors said that it had sent documents to Vietnam Securities Depository (VSD) to carry out the procedures for registration of centralised depository of NamABank’s shares, as a basis for completing the procedures for listing securities, expectedly by the end of December this year to be registered.
Although the listing was still submitted regularly by banks, the continuous missed appointment from previous years had caused shareholders to question the feasibility of the plan.
Talking to BizLIVE reporter, Le Duc Khanh, Strategic director of Petroleum Securities Company (PSI), said that whether banks would succeed on the stock exchange did not depend too much on the market but on banks themselves.
The current market, as Khanh assessed, was quite favourable. It was important that the internal bank itself felt genuinely ready. Many banks did not want list because of the transparency or the handling of bad debts. If they had not done well, they would not wish to be listed, Khanh said.
PSI experts also said that, basically, bank stocks had a lot of room for growth and were still receiving considerable attention from investors thanks to good fundamentals.
