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Mar 05, 2018 / 10:45

Vietnamese bank to sell treasury shares to foreign investors

Ngoc Thuy

Techcombank plans to list its shares on the Ho Chi Minh City Stock Exchange (HoSE) this year and sell over 158 million treasury shares to foreign investors, informed the bank at its annual shareholders` meeting on March 3.

The bank plans to sell the treasury shares to foreign investors at a minimum price of VND23,445 (US$1.03) to raise at least US$162.74 million from the sale, said chairman Ho Anh Hung at the event. 
 
Techcombank plans to sell its shares to foreign investors.
The bank will prioritize investors from the US and Europe for the share sale. The proceeds from the treasury share sale will be used to increase the bank's assets, expand its network and credit operations, and to invest in government bonds. 

Techcombank also plans to sell 14 million preferred shares from the treasury stock to its employees within the second quarter of this year, following the Employee Stock Ownership Plan (ESOP). 

The bank planned to list its shares on HoSE last year but it felt the timing was not right, chairman Hung Anh said. "With the bank's plan to sell shares to foreign investors and employees, 2018 is the right time to list on the stock market," he emphasized. 

The Vietnamese lender's pre-tax profit stood at VND8 trillion (US$352 million) in 2017. The bank targets s pre-tax profit of VND10 trillion (US$440 million) this year, up 24% compared to last year. 

To achieve this target, Techcombank expects to raise its total assets to VND315.2 trillion ($13.8 billion), up 17% year-on-year, increasing capital mobilization rate by 40% and credit growth by 18%. Meanwhile, the bank is also committed to keep bad debts under 2%. 

In June 2017, Techcombank proposed to repurchase shares from existing stakeholders and to keep them as treasury shares. As part of the plan, HSBC sold its 172 million shares to Techcombank at VND23,445 (US$1.04) per share. The shares previously accounted for 19.4 per cent of Techcombank's charter capital and are currently priced at a total of VND4 trillion (US$178.1 million). 

With this sale, foreign ownership in Techcombank is officially 0%. Techcombank has expressed intention to increase foreign ownership but keep it under 30% of its charter capital. 

The State Bank of Vietnam (SBV) recently green-lighted Techcombank to sell its entire stake in its financial arm Techcom Finance to Lotte Card Company, which is part of South Korean Lotte Group. 

Without disclosing the specific value of the deal, Techcombank's chairman stressed that selling its financial arm will help aid the bank's growth.

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