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Vietcombank’s CEO: foreign strategic shareholders not the skeleton key
Nguyen Phuoc Thanh, General Director of Vietcombank, admitted that it is very difficult to seek foreign strategic partners at this moment, but he said that the bank will not seek out foreign strategic partners at any cost.
Mr Thanh said that with the US economic recession and the falls in the global stock markets, foreign investors may become less interested in Vietcombank’s shares, especially when the average accepted price of the bank’s shares at the IPO organized in December 2007 is considered high. (Under the current regulations, the prices of shares to be sold to foreign partners will be equal or higher than the average IPO prices).
However, he said that foreign strategic shareholders are not ‘the skeleton key’, which can help Vietcombank solve all problems, and which Vietcombank must have in its development.
“Having foreign strategic shareholders proves to be a good solution which can help improve the bank’s corporate governance. However, we do not expect to have foreign strategic shareholders,” said Mr Thanh.
He added that Vietcombank will have its own way to reach its business goal.
When trying to attracting foreign strategic shareholders, Vietcombank, like other banks in Vietnam, hope that foreign strategic investors can bring two things to domestic banks: money and technical assistance. Money, or capital, is not the big problem now for Vietcombank. Regarding the technical assistance, a lot of Viecombank’s partners have committed to cooperate with Vietcombank in the fields the bank needs. The partners have also promised to do business and develop services with Vietcombank.
“If necessary, we will hire consultants,” said Mr Thanh, implying that not only foreign strategic investors, but consultants also can help.
This is the first time Mr Thanh admitted that it is difficult to find foreign strategic investors. Prior to that, Mr Thanh and his deputy, Mrs Nguyen Thi Thu Ha, only said that the negotiations between Vietcombank and foreign partners were very tough, and the two parties still could not reach the agreement on share prices.
If Vietcombank cannot sell shares to foreign partners, it will not be able to sell 20% of shares to the outside investors as required to be eligible to list on the bourse.
However, Mr Thanh has confirmed that Vietcombank will still list on the bourse in June 2008 as planned.
“We have asked for the permission from the Prime Minister on the listing plan, and he had given the nod,” Mr Thanh said.
He added that the decision by the Prime Minister shows the determination of the Government of Vietnam in equitizing state owned financial institutions. Currently, Vietcombank’s shares are being held by 15,000 shareholders, which means that Vietcombank has become a public company. Besides, the bank’s shares worth more than VND1tril ($62.5mil) will be a huge volume of commodities for the market.
“With such factors, the listing of Vietcombank on the bourse is acceptable,” he stated.
According to Mr Thanh, some 90% of investors, who registered to buy Viecombank’s shares at the December’s IPO have made payment for the shares, while only 10% of investors have given up the game, which means that Vietcombank’s shares are very attractive.
However, on OTC websites, Vietcombank’s shares are being offered to sell at VND98-99,000/share only, a bit lower than the lowest successful bidding price at VND102,000 at the IPO.
Mr Thanh has consoled the investors, who paid VND102,000/share or higher at Vietcombank’s IPO, that the price level of VND100,000/share is acceptable, and that this reflects the real value of Vietcombank.
To prove his words, he said that Vietcombank’s profit in 2008 will increase by 40% compared to 2007, and this is within reach.
There are many factors, he said, which can show that the goal is achievable. Vietcombank made heavy investment in 2007, and it will get achievements for the investments in 2008. In 2008, Vietcombank will call back the sums of money it is depositing at foreign banks to make domestic investments, which can bring higher profit. Besides, Vietcombank’s staff will work harder and better in 2008, after the equitization, which allows for fat profit.
VNN
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