The trading session on August 27 witnessed an impressive performance from Vietcombank’s VCB stock. From the start of the trading day, overwhelming buying pressure pushed the stock to its upper limit, reaching a historic high of 69,100 VND per share (adjusted price). Accompanying the price action, liquidity in this stock also surged, with over 31 million units matched directly on the exchange – the highest in history.
With this upward momentum, Vietcombank’s market capitalization set a new record in the Vietnamese stock market at VND 577,377 billion, surpassing the combined market caps of VPBank and Techcombank.
VCB stock performance
The influx of money into Vietcombank’s stock occurred as it was one of the weakest performers in the banking sector in the past period. Previously, most of the stocks in the industry had risen by 30-50%, or even up to 100%, making VCB’s valuation more attractive.
In the flow of market information, on August 25, S&P Global Ratings announced an upgrade in the long-term credit rating for Vietcombank from BB to BB+, with a stable outlook. At the same time, S&P maintained Vietcombank’s short-term rating at B.
Explaining the upgrade, S&P stated that this followed the adjustment of Vietnam’s BICRA rating to the “8” group. S&P has also adjusted its assessment of Vietcombank’s stand-alone credit profile (SACP) upward from bb- to bb+. This move reflects the view that the bank will maintain a stronger capital position over the next 24 months and sustain asset quality that is better than peers at the same rating level. The bank’s risk-adjusted capital (RAC) ratio is estimated to be around 5.8%-6.3% in the next two years, compared to 5.9% at the end of 2024.
In S&P’s view, Vietcombank’s risk profile will remain stable despite macroeconomic uncertainties. Although the bank’s non-performing loan (NPL) ratio may increase slightly to around 1.2% in the next 12-24 months, it is still significantly lower than the industry average (4.0%-5.0%). Additionally, Vietcombank’s high loan loss provision coverage ratio (over 200%) provides a large enough buffer against unexpected credit losses.
In addition to the upgraded credit rating, investors are also anticipating Vietcombank’s upcoming “game” of capital raising.
At the recent annual general meeting, Vietcombank approved a plan to issue private placement shares to increase its charter capital. Specifically, the bank will offer a maximum of 543.1 million shares to a maximum of 55 investors, including strategic investors and professional securities investors (equivalent to 6.5% of the outstanding shares at the time of the offering or at the time of the first offering in case of multiple offerings).
The offering can be made in one or more tranches in 2025-2026. The timing and number of shares offered in each tranche will depend on the actual demand from investors.
In addition to the private placement plan, Vietcombank has two other dividend payment plans in shares pending approval from the authorities.
Earlier in March, Vietcombank’s Board of Directors approved the 2023 profit distribution plan based on the approval principle of the State Bank. Specifically, after setting aside various funds, the bank’s remaining profit for 2023 amounted to more than VND 22,770 billion. Vietcombank will use this entire profit amount to pay dividends in shares.
The Board of Directors of Vietcombank authorized the Executive Management Board to direct the formulation of a capital increase plan through dividend payment in shares from the remaining profit and the Supplementary Capital Reserve Fund, and to report to the State Bank for submission to the Government and the National Assembly for approval.
Previously, the Board of Directors of Vietcombank had also approved the 2022 profit distribution plan based on the approval principle of the State Bank. Accordingly, the bank will use VND 21,680 billion of remaining profit for 2022 to pay dividends in shares according to the profit distribution plan approved by the 2023 Annual General Meeting of Shareholders.
Thus, if approved by the authorities, Vietcombank may soon issue shares to increase its charter capital to over VND 100,000 billion.
Additionally, in recent times, Vietcombank has recorded positive information, including being in the group of banks allowed to reduce their mandatory reserve requirements when taking over a specially controlled bank, and having a significant advantage in obtaining a license for gold bar production, among others.
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