HD Bank listed more than 980 million shares on the Ho Chi Minh City Stock Exchange (HOSE) on January 5. Before the listing, foreign investors had spent nearly US$ 300 million to own 21.5% of HD Bank’s chartered capital for price of VND 32,000 per share. With the initial offering price of VND 33,000 per share, HD Bank is valued at VND 32.4 trillion (or US$1.43 billion), thus becoming one of 20 largest companies on HOSE.
HD Bank became the first commercial bank in Vietnam making IPO this year.
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Specifically, on last January, Vietnam International Bank (VIB) made their debut on the Unlisted Public Company Market (UPCoM), afterwards were Kienlong Bank, VP Bank, LienVietPost Bank and BacA Bank, thus, adding VND 95 trillion (roughly US$ 4.2 billion) to stock market capitalization.
With this listing, it is expected that many companies with large market capitalizations will soon follow suit, thus increasing the liquidity in the market and opening chances for foreign and domestic investors.
Most Vietnamese commercial banks achieved double-digit profit increases in 2017 with strong credit growth of about 19%. Non-performing loans (NPL) were kept within 3% of total lending. As such, returns on assets and on equity among banks reached the highest levels in five years.
Analysts attribute improvements last year to better performances by private lenders such as HD Bank. In the morning session, investors bought in 19 million HD Bank shares at VND 38,900 per share, an increase of 18% above the offer price. Its market capitalization ranks among the top 20 listed companies on the exchange, which is home to more than 400 companies.
HDBank was established in 1990, and since 2008 has been more than 10% owned by Nguyen Thi Phuong Thao and her company. Thao is the founder and chief executive of Vietjet Air, the biggest budget airline in Vietnam. Thao also serves as the bank's vice chair.
HD Bank reported a net profit of VND 1.93 trillion for 2017, up 112% year on year, and plans to increase that 61% to VND 3.1 trillion in 2018. Currently, the bank’s rate of non-performing debt (NPL) is 1.5%. HD Bank plans to set the annual growth rate of net profit at 37% per year until 2021 with customer base of 15 million, aiming to become Vietnam’s top bank instead of the current 8th rank.
Mounting bad debt had been weighing on Vietnam's banks since 2012, necessitating structural change including the introduction of a body to buy bad debt, nationalization of weak institutions, and long-term consolidation of the sector. Banks expected to go public in 2018 include Techcombank, TPBank, Orient Commercial Bank, Nam A Bank, Maritime Bank, VietABank, and SeABank.
