Business
Vietnam’s Military Bank plans 7.5% stake sale to foreign investor
The sale would be conducted through the issuance of 123 million new shares and offloading of 38.9 million of treasury stocks.
Hanoi-based Military Commercial Bank (MB Bank) is scheduled to sell 7.5% of its stake to foreign investors in 2019, according to Luu Trung Thai, CEO of the lender.
The sale would be conducted through the issuance of 123 million new shares and offloading 38.9 million of treasury stocks, Thai told VnExpress.
The bank may sell shares to one or several foreign investors, and they are not necessarily the bank’s strategic investor, Thai added.
Thai stated the sale of a 7.5% stake is sufficient for the bank’s capital needs in the next three years, despite having 10% room remaining for foreign ownership.
Vietnam caps the foreign ownership in a local lender at 30%.
At MB Bank’s annual general meeting in 2019, the bank’s executives hinted at the possibility of raising capital in the coming time. The mentioned plan was to issue shares through private placement, instead of offering to existing shareholders.
The move aimed to diversify the structure of shareholders, as some major ones are currently state agencies.
The government currently owns 44% of Military Commercial Bank through several military-linked companies, according to FactSet, a data provider. Domestic and foreign financial institutions own 11%, with the rest held by individual investors and entities such as mutual funds.
MB Bank has more than 100 branches, including two in Laos and Cambodia, and a representative office in Russia, according to the bank’s website.
Its net profit nearly doubled to US$267 million last year, and its total assets ended 2018 close to US$16 billion.
At the close on July 12, MB Bank’s stock was traded at VND21,350 (US$0.92) apiece, posting market capitalization close to VND45.12 trillion (US$2 billion).
Sources from Wall Street Journal said the stake sale would likely attract interest from other Asian banks, possibly from Japan and South Korea, among others, and help the MB Bank meet new international capital requirements.
In 2012, Bank of Tokyo-Mitsubishi UFJ paid US$743 million for a 20% stake in the state-owned Vietnam Joint Stock Commercial Bank for Industry and Trade, or VietinBank, and in 2016, Singapore sovereign-wealth fund GIC Pte. Ltd. acquired a 7.7% stake in Vietcombank, the country’s largest bank by market capitalization. Last year, one of the country’s largest private sector banks, Techcombank, raised US$922 million in an initial public offering.
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The bank may sell shares to one or several foreign investors, and they are not necessarily the bank’s strategic investor, Thai added.
Thai stated the sale of a 7.5% stake is sufficient for the bank’s capital needs in the next three years, despite having 10% room remaining for foreign ownership.
Vietnam caps the foreign ownership in a local lender at 30%.
At MB Bank’s annual general meeting in 2019, the bank’s executives hinted at the possibility of raising capital in the coming time. The mentioned plan was to issue shares through private placement, instead of offering to existing shareholders.
The move aimed to diversify the structure of shareholders, as some major ones are currently state agencies.
The government currently owns 44% of Military Commercial Bank through several military-linked companies, according to FactSet, a data provider. Domestic and foreign financial institutions own 11%, with the rest held by individual investors and entities such as mutual funds.
MB Bank has more than 100 branches, including two in Laos and Cambodia, and a representative office in Russia, according to the bank’s website.
Its net profit nearly doubled to US$267 million last year, and its total assets ended 2018 close to US$16 billion.
At the close on July 12, MB Bank’s stock was traded at VND21,350 (US$0.92) apiece, posting market capitalization close to VND45.12 trillion (US$2 billion).
Sources from Wall Street Journal said the stake sale would likely attract interest from other Asian banks, possibly from Japan and South Korea, among others, and help the MB Bank meet new international capital requirements.
In 2012, Bank of Tokyo-Mitsubishi UFJ paid US$743 million for a 20% stake in the state-owned Vietnam Joint Stock Commercial Bank for Industry and Trade, or VietinBank, and in 2016, Singapore sovereign-wealth fund GIC Pte. Ltd. acquired a 7.7% stake in Vietcombank, the country’s largest bank by market capitalization. Last year, one of the country’s largest private sector banks, Techcombank, raised US$922 million in an initial public offering.
