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Banks prefer selling stake to foreign strategic partners
Many banks would prefer selling stake to foreign strategic partners before being listed on the stock exchange with a view to enhance their capacity.
DongA Bank, for instance, has cancelled listing shares on the centralised stock exchange that was approved a few years earlier citing the desire to hunt appropriate strategic partners.
Some 900 billion dong shares could have been issued to overseas partners in an attempt to scale up chartered capital to 6 trillion dong, Pham Van Bu, chair of DongA Bank was quoted as saying at the shareholders general meeting on 30 March in HCM City. However, the share price has tumbled to below the face value of VND 10,000 per share. As a result, selling shares to foreign partners for the time being could hurt shareholders' interests, presumed the board of directors. This lender, therefore, has opted for offering stake to foreign partners prior to listing.
On the contrary, Southern Bank has a strategic partner, United Overseas Bank Limited (UOB) that has already held 20pct of its stake. Therefore, shareholders' shares gathering on listing would hardly worry this bank since they had already found an appropriate partner a few years ago.
In another movement, Nguyen Thi Xuan Loan, chairwoman of NamA Bank's management board implied the likelihood of listing on HOSE this year, yet affirmed not to enter any M&A deals with other peers. Rather, this bank would count on its own capacity to grow and develop. "Our profound capacity would enable us to stand out of the currently vibrant M&A wave", she emphasized.
There have been by far nine banks listed on the centralised stock exchange, of which six have sold stake to strategic partners. Despite existing stock market difficulties, banks' shares have become again appealing to investors in the recent times.
Shareholders general meeting at these credit institutions that have been taking place have drawn a great deal of attention from investors and shareholders as merger and acquisition have become an increasingly important concern.
M&A in banking sector would call for extreme caution which has provoked many lenders to advance in their business on their own. However, M&A have now become an inevitable trend and success of bank pioneers in M&A could probably make development opportunities offered via this type of cooperation much clearer to feeble entities.
stockbiz
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