Illustrative image
During the 2023 annual general meeting, former Chairman of Vietcombank Pham Quang Dung stated that the plan to issue private placements for foreign investors by the bank is currently paused at the stage of hiring advisory firms. According to the plan, Vietcombank will carry out private placements for foreign investors during the 2023-2024 period.
The plan to privately sell 6.5% of the shares had been put forth by Vietcombank in 2019 but has yet to be completed. In this plan, the bank intends to privately sell 307.6 million shares to partner Mizuho Bank (46.1 million shares) and other investors (261.4 million shares).
At a recent extraordinary general meeting, BIDV also approved a delay in the implementation of the plan to sell additional shares under the 2023 capital increase plan. Specifically, the general meeting decided to defer the implementation of the capital increase plan to 2024.
According to the 2023 capital increase plan, BIDV also plans to issue an additional 455 million shares through public or private offerings. However, the bank has yet to disclose the details of the offering plan, although it has long had a plan to privately issue shares to foreign investors and has not yet successfully implemented it.
During the 2023 annual general meeting, Chairman Phan Duc Tu said: “The bank’s leadership team has made considerable effort to carry out this task, having contacted a total of 38 potential investors over the past 3 years. However, the unfavorable economic situation and the narrowing of risk appetite of the investors for emerging markets, along with the tightening monetary policies of countries, have led to a decrease in investment expansion into Vietnam”.
“In 2023, we will continue to work on this task. Currently, we have some potential investors but cannot disclose them. We will try to carry out this task in 2023,” Mr. Tu emphasized at the 2023 annual general meeting.
In the private banking sector, SHB Chairman Do Quang Hien has informed shareholders that the sale of shares to foreign investors will be completed in 2023 or early 2024. Previously, at the 2023 annual general meeting, SHB approved the continued implementation of the capital increase plan through the issuance of shares to foreign investors and strategic foreign investors.
In July 2023, Reuters quoted a close source as saying that SHB is in the process of negotiating the sale of a 20% stake to foreign investors. Some investors from South Korea and Japan have approached SHB in this deal, with the bank’s valuation estimated at $2 – $2.2 billion.
The source also said that the agreement is expected to be completed in 2023 or early 2024 and requires the approval of the State Bank.
LPBank is in the process of implementing the steps in the plan to privately issue 300 million shares to foreign investors. The specific offering time will be decided by the bank’s board of directors after obtaining approval from the competent state agencies. Shares offered to foreign investors are subject to a transfer restriction of 3 years for strategic investors and 1 year for professional securities investors.
In July 2023, the Board of Directors of SeABank approved the plan to privately issue up to 94.6 million shares, equivalent to 4.6366% of the outstanding shares, to be offered to one professional securities investor, expected to be Norfund (The Norwegian Investment Fund for developing countries). This deal will bring in a minimum of VND 1,217 billion and a maximum of VND 3,503 billion for SeABank.
Speaking at a recent meeting with investors, Mr. Hoang Thanh Tung, Director of the Investment Relations Department of HDBank, said that the bank has made the necessary preparations for strategic partners, to reserve about 10% of the foreign room for capital increase.
“The plan to sell shares to strategic investors can be fully implemented when market conditions are favorable and the bank finds suitable partners,” Mr. Hoang Thanh Tung said.
According to Mr. Tung, recently HDBank has received interest from some foreign partners from South Korea, Europe, and the US. The choice of investors to increase capital, to attract strategic shareholders, is always in the bank’s direction of increasing financial capacity to meet growth demands while ensuring capital safety and liquidity.
In a recent research report, VCSC stated that with faster economic growth in Vietnam in 2024, the analysts expect that capital mobilization activities will be stronger from the second half of 2024. In particular, Vietcombank, BIDV, and LPBank are expected to raise new capital through private placements with a total estimated value of VND 64.9 trillion in 2024.
For HDBank, the bank plans to issue up to VND 12.2 trillion of international convertible bonds in 2024; however, VCSC believes that the timeframe may be extended as domestic funding costs will remain favorable in most of 2024.
