Vietcombank files for private issue of 360 million shares

The commission (SSC) said the country’s third largest bank by assets proposes to make a private issue of 360 million shares, equivalent to 10 percent of its charter capital. The lender plans to sell nearly 54 million shares to its strategic partner, Japan’s Mizuho Bank, to ensure it retains its 15 percent stake post dilution. It will sell the remaining 306 million shares, or 7.73 percent of its charter capital, to other undisclosed investors. The bank has not disclosed the issue price either. Its shares closed at VND58,000 ($2.5) Friday on the HCMC market.

The State Bank of Vietnam recently gave Vietcombank approval to increase its charter capital by 10 percent to VND39.58 trillion ($1.69 billion).

The lender has also received approval from its shareholders to make the private placement. Vietcombank and other top lenders, including BIDV and Vietinbank, have been struggling to increase their capital to meet international capital adequacy norms.

The second Basel Accords, or Basel II, prescribe minimum capital adequacy of 8 percent of risk-weighted assets for all financial institutions to cover operational risks. In 2016 Vietcombank signed a deal with Singapore sovereign wealth fund GIC Private Limited to sell a 7.73 percent stake. The deal has yet to be consummated, with the bank’s chairman, Nghiem Xuan Thanh, saying they have been unable to agree on a price.

As a state-owned bank, Vietcombank’s issue of new shares must not be at a price lower than their current market price or a minimum value set by the government.

However, the price offered by GIC did not meet this requirement.

If the private issuance of VND3.6 trillion ($156.5 million) is successful, Vietcombank will have the highest chartered capital in the industry of nearly VND40 trillion ($1.74 billion).