OCB shares ‘undervalued,’ says bank chairman

Shares of OCB are undervalued by 25 percent, its chairman Trinh Van Tuan said at the private lender’s annual general meeting Wednesday.

He said his assertion was backed by many stock brokerages that have suggested a price of VND30,000 ($1.31) for the OCB ticker, currently trading on the Ho Chi Minh Stock Exchange (HoSE) at VND24,000.

A private bank usually has a price to earnings (P/E) ratio of 11, while that of OCB is less than 7, he said. The P/E ratio reflects how much investors are willing to pay today for future growth expectations.

OCB listed on the HoSE on January 28 when the market plunged, pulling it down by 20 percent in the first session. The ticker has since recovered by 27 percent.

The bank plans to pay dividends by shares with each shareholder allowed to buy 20-25 more shares for every 100 shares owned.

It also wants to issue 70 million shares via private placements and five million shares to its employees. Several foreign investors have expressed interest in the bank since last year, Tuan said.

The bank’s charter capital is set to rise by 32 percent this year to VND14.45 trillion ($627 million).

Last year, the bank’s pre-tax profit surged 37 percent year on year to VND4.42 trillion. It targets a 25 percent credit growth this year, pending approval from the central bank.