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Vietcombank’s unexpected prosperity rekindles investor confidence
The Bank for Foreign Trade of Vietnam (Vietcombank) has announced a profit of VND3.1tril, much higher than the estimated VND2.6tril in its information disclosure released before it implemented its equitization plan.
Many investors believe the bank deliberately released the annual report now, amidst fears that many investors who successfully bought Vietcombank shares at the IPO held in December will not follow through on their purchases.
Analysts had said investors who paid VND118,000/share or higher would give up the security deposit rather than buying the weaker than expected items. January 25 is the deadline for making payment.The VND118,000/share level is too high when considering that investors are now buying them on the OTC market for a much more modest VND104-105,000/share.
Vietcombank shares are losing value daily on the OTC market. Right after the IPO results were announced, the bank’s shares were selling at VND110,000, but the price has now dropped to VND104-105,000.
When asked if Vietcombank announced it annual profit of VND3.1tril to retain investors, Nguyen Thu Ha, Deputy General Director of Vietcombank said the institution’s only aim is to polish its image by releasing the prosperous figure.
In fact, the bank’s turnover and profit could only be calculated after December 31, 2007, after the bank checked receipts and expenses in the reports submitted by its branches nationwide.
Explaining why Vietcombank estimated such a modest pre-tax profit in 2007, Mrs. Ha acknowledged their forecasts were not accurate. Moreover, she said that as Vietcombank has a wide network, 205 branches and transaction points nationwide, it takes time to check reports and determine an accurate number.
“Vietcombank did not intend to conceal figures because transparency is our most valued principle.
Vietcombank believes they will witness a much higher growth rate in 2008, perhaps 40% over 2007.
“Though the average bidding price of Vietcombank shares was higher than those offered by foreign investors, they are still expressing their willingness to become our strategic partners. Negotiations are still underway and we are confident an agreement will be reached soon,” said Mrs. Ha
VNN
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