More bank shares are to be sold to foreign investors

Many banks in  Vietnam are planning to sell more shares to foreign investors with the aim of attracting more diverse capital and enhancing competitiveness, the State-run Vietnam News Agency (VNA) has reported.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) launched a plan to issue 6.5% of its total shares through private placements in 2019, but has yet to complete the work.

The bank is set to conduct private placements of about 307.6 million shares for foreign investors in 2023 - 2024, including 46.1 million shares for Mizuho Bank of Japan and the rest 261.4 million for others.

Meanwhile, the shareholders' congress of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) last year decided to reschedule the time for raising its charter capital through share offerings to 2024.

In its 2023 capital raising scheme, BIDV planned to issue an additional 455 million shares via public offerings or private placements. It has yet to detail the scheme but long intended to give private placements to foreign investors.

BIDV Chairman Phan Duc Tu was quoted by VNA as saying  that his bank will press on with this plan, and some potential investors have expressed their interest.

The Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank), for its part, is weighing a plan to mobilize $500 million by selling shares, according to Bloomberg.

At a recent meeting with investors, Hoang Thanh Tung, Director for the Investor Relations Department at HDBank, noted that the bank has made necessary preparations for strategic partners and reserved about 10% of the foreign ownership room for share offerings.

The plan to sell part of its capital to strategic partners is completely implementable when market conditions are favorable and the bank finds out suitable partners, he added.

According to VNA, General Director of Nam A Bank Tran Ngoc Tam said this bank is negotiating with foreign strategic partners to seek suitable investors. It will use the 20% foreign ownership permissible level to attract more foreign funding.

Meanwhile, Chairman of the Saigon - Hanoi Commercial Joint Stock Bank (SHB) Do Quang Hien told shareholders that this bank will complete share offerings to foreign investors this year.

At their 2023 annual meeting, SHB shareholders approved the continuation of increasing the bank’s capital by issuing shares for foreign and strategic foreign investors.

Jens Lottner, CEO of the Vietnam Technological and Commercial Joint Stock Bank (Techcombank), was quoted by VNA as saying that this bank can open its door to more foreign investors during its search for long-term strategic partners in the time ahead.

He noted that foreign investors hold about 22% of the Techcombank shares at present and can possess another 8%.

Experts forecast foreign capital is likely to flow strongly into the banking market of Vietnam in the coming time.

However, Dominic Scriven, founder and Chairman of Dragon Capital, said the biggest barrier to engage in Vietnamese banks is the limited room for foreign investors. Meanwhile, some banks previously sold part of their shares to foreign buyers, so it is necessary to expand the percentage of foreign ownership in the domestic banking system.