Vietnam Prosperity Commercial Joint Stock Bank (VPBank VPB) has continued to announce information about buying treasury shares. Accordingly, the bank plans to buy a maximum of 50 million shares as treasury shares, equivalent to 1.976 percent of charter capital via put-through or order-matching methods from October 2nd to 31st 2019.
The source to buy treasury shares is from the retained undistributed profit as of December 31st 2018 (5.187 trillion dong).
As estimated, based on the closing price on September 20th which was 21,400 dong per share, VPBank will have to spend more than one trillion dong to buy treasury shares this time.
VPBank currently has 73.2 million treasury shares, equivalent to 2.894 percent of charter capital. If the plan is successful, the number of treasury shares of VPBank will increase to 123.2 million shares, equivalent to over 4.8 percent of charter capital.
According to VPBank, the bank’s potential development opportunities are still being well evaluated. However, due to macroeconomic factors of the market and the banking industry, the attractiveness of VPB shares to investors is not as good as before, leading to the considerable decrease in VPBank’s share price compared to the previous time.
The purchase of treasury shares aims to stabilise the bank’s share price, reduce the number of outstanding shares in order to increase the profit per share ratio for investors. At the same time, the treasury share purchase is also considered an investment in a valuable asset with high profitability in the future.
