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Vietcombank equitisation: ‘strategic speculators’ no cause for concern
Le Xuan Nghia, Director of the Banking Development Strategy Department under the State Bank of Vietnam, said that there was no need to worry about so-called ‘strategic speculators’.
How much do you expect the price of Vietcombank’s shares will be?
In principle, IPO price is always higher than the price to be applied to strategic partners. That was exactly the thing that happened in China. China’s Incombank’s shares’ IPO price, for example, was Yuan2.8, while the price at which the shares were sold to strategic partners was Yuan1.3.
Such a wide gap may not happen in Vietnam with Vietcombank, but the selling price to be applied to strategic shareholders may be a little lower than the IPO price.
Please tell me if there is worry about the fact that the ‘strategic shareholders’ will also be the ‘strategic speculators’?
No, there isn’t. First, the current regulations do not allow strategic shareholders to sell shares; therefore, there would be no opportunities for them to speculate. Second, strategic investors are all prestigious and well known on the international market, and there is no reason for them to make small speculation deals in Vietnam’s banks.
Vietcombank now has three short listed strategic investors, and each of them has its own idea. Nomura thinks that it will focus on developing Vietcombank’s securities company, helping Vietcombank become a giant in the finance market. Goldman Sachs plans to turn Vietcombank into one of the biggest investment banks. General Electric wants to turn Vietcombank into a powerful group in terms of consumer credit.
What is your forecast about IPO price of Vietcombank shares and its impact on other share items?
I’m sure that the IPO prices of Vietcombank shares will be higher than Bao Viet’s IPO prices, and so are other investors.
The fact that Vietcombank issues a large volume of shares does not mean that the prices of other share items on the market will decrease. Big foreign and domestic partners have reserved sums of money for banking on Vietcombank already. I mean the big volume of commodities can find big clients, who accept high prices.
How about enterprise governance after equitisation?
After becoming a joint stock bank, Vietcombank will have the right to operate in accordance with the standards on enterprise governance stipulated by the central bank, not matter how many percents of stakes the state holds in the bank. The central bank is going to promulgate new standards on bank governance, which will replace Decree 49. In the new regulations, the standards for commercial banks will be adjusted to come in line with international practice.
What is the credit rating for Vietcombank?
Vietcombank got the highest credit rating among Vietnam’s banks, at ‘D’, from Fitch Ratings, which means above average.
How will Vietcombank’s equitisation experiences help other big groups in their equitisation process?
Vietcombank has been equitised in accordance with international standards. I’m sure this is the first time Vietnam has applied a legal consultancy system that follows international standards.
Vietnam invited an international consultant which has been involved in many equitisation programmes worldwide, especially it participated in the equitisation process in China. The legal consultancy and international auditing have been carried out methodically.
I think enterprises and other banks will draw valuable lessons from Vietcombank’s lessons, and I believe that it will take less time and money to equitise other banks. Other state-owned banks will begin equitising in the first quarter of 2008, including the Bank for Development and Investment of Vietnam (BIDV), and the Vietnam Industrial and Commercial Bank (Incombank).
VnEconomy
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