Last update 01/11/2010 02:47:46 PM (GMT+7)
Big shareholders turn their backs to bank shares
VietNamNet Bridge – State shareholders, i.e. the economic institutions, where the state holds controlling stakes, now turn their backs to bank shares, which they had never done before.
To date, the State Bank of Vietnam has approved the plans to increase chartered capital to three trillion dong by 16 domestic joint stock banks. As required, banks must have the chartered capital of three trillion dong at minimum by the end of 2010. However, a lot of banks are reportedly facing big difficulties in increasing capital, because state shareholders do not intend to inject more money in the banks.
Turning a deaf ear to banks’ share issues
Since state shareholders do not havea demand for more bank shares, they have aucioned the shares additionally issued by banks. Most recently, the HCM City State Financial Investment Company (HFIC) auctioned nearly 15 million options on HD Bank’s shares at the starting price of 110 dong per option.
The company has also auctioned 3.82 million options on Viet A Bank’s shares. Meanwhile, VOSCO, a shipping firm, has auctioned 4.15 million options on Military Bank’s shares.
Being a small bank, Navibank is thought to face many difficulties when trying to increase chartered capital. The Vietnam Textile and Garment Group (Vinatex) does not intend to maintain the ownership ratio at the bank.
In January 2009, the Vietnam National Oil and Gas Group (PetroVietnam) became a shareholder and strategic partner of Ocean Bank. The bank plans to increase its chartered capital to 3000-4000 billion dong in 2010 and to five trillion dong in 2013. However, a serious problem has arisen when Deputy Prime Minister Nguyen Sinh Hung instructed PetroVietnam not aim for20 percent of Ocean Bank’s shares since the group has capital difficulties.
Vietcombank, which turned from a state-owned bank into a joint stock banks three years ago, is now holding 19 percent of stakes of Gia Dinh Bank. Vietcombank is still considering whether to pour more money into Gia Dinh Bank to maintain the current ownership ratio of 19 percent or to withdraw its capital altogether.
Orient Bank has got the approval from the State Bank for its plan to increase the chartered capital from two trillion dong to 3.1 trillion dong in 2010 by issuing more shares, including to existing shareholders. Ben Thanh Corporation, the biggest shareholder of the bank, now holding 10.6 percent of stakes of the bank, has agreed to increase capital, but it is still unclear if it try to keep the current ownership ratio at the bank or not. Ben Thanh said it will still have to ask for the permission from the HCM City People’s Committee.
Banks still have opportunities
Under the current laws, banks must implement the capital increase within 12 months since the day they get the permission from the central bank.
Cao Sy Kiem, former Governor of the State Bank said that if state shareholders do not spend money to buy the shares to be additionally issued by banks, this would create a great challenge for the banks in trying to increase their capital. However, Kiem said banks still have many other measures availablerather than relying on state shareholders.
“There are two solutions. First, they can issue shares to the public. Second, they can look for foreign partners,” Kiem said, adding that no matter who their buyers are, banks need to set up reasonable sale prices and set reasonable requirements. “Especially, they may have to make compromises in negotiations on some matters,” he said
Doanh Nhan
To date, the State Bank of Vietnam has approved the plans to increase chartered capital to three trillion dong by 16 domestic joint stock banks. As required, banks must have the chartered capital of three trillion dong at minimum by the end of 2010. However, a lot of banks are reportedly facing big difficulties in increasing capital, because state shareholders do not intend to inject more money in the banks.Turning a deaf ear to banks’ share issues
Since state shareholders do not havea demand for more bank shares, they have aucioned the shares additionally issued by banks. Most recently, the HCM City State Financial Investment Company (HFIC) auctioned nearly 15 million options on HD Bank’s shares at the starting price of 110 dong per option.
The company has also auctioned 3.82 million options on Viet A Bank’s shares. Meanwhile, VOSCO, a shipping firm, has auctioned 4.15 million options on Military Bank’s shares.
Being a small bank, Navibank is thought to face many difficulties when trying to increase chartered capital. The Vietnam Textile and Garment Group (Vinatex) does not intend to maintain the ownership ratio at the bank.
In January 2009, the Vietnam National Oil and Gas Group (PetroVietnam) became a shareholder and strategic partner of Ocean Bank. The bank plans to increase its chartered capital to 3000-4000 billion dong in 2010 and to five trillion dong in 2013. However, a serious problem has arisen when Deputy Prime Minister Nguyen Sinh Hung instructed PetroVietnam not aim for20 percent of Ocean Bank’s shares since the group has capital difficulties.
Vietcombank, which turned from a state-owned bank into a joint stock banks three years ago, is now holding 19 percent of stakes of Gia Dinh Bank. Vietcombank is still considering whether to pour more money into Gia Dinh Bank to maintain the current ownership ratio of 19 percent or to withdraw its capital altogether.
Orient Bank has got the approval from the State Bank for its plan to increase the chartered capital from two trillion dong to 3.1 trillion dong in 2010 by issuing more shares, including to existing shareholders. Ben Thanh Corporation, the biggest shareholder of the bank, now holding 10.6 percent of stakes of the bank, has agreed to increase capital, but it is still unclear if it try to keep the current ownership ratio at the bank or not. Ben Thanh said it will still have to ask for the permission from the HCM City People’s Committee.
Banks still have opportunities
Under the current laws, banks must implement the capital increase within 12 months since the day they get the permission from the central bank.
Cao Sy Kiem, former Governor of the State Bank said that if state shareholders do not spend money to buy the shares to be additionally issued by banks, this would create a great challenge for the banks in trying to increase their capital. However, Kiem said banks still have many other measures availablerather than relying on state shareholders.
“There are two solutions. First, they can issue shares to the public. Second, they can look for foreign partners,” Kiem said, adding that no matter who their buyers are, banks need to set up reasonable sale prices and set reasonable requirements. “Especially, they may have to make compromises in negotiations on some matters,” he said
Doanh Nhan
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