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Banks struggle to increase charter capital
Bank share prices have dropped sharply in line with the common downtrend on the securities market, making it hard for joint stock banks to issue shares to increase their charter capital.
According to a decree issued by the Government in 2006, a commercial joint stock bank is required to have a charter capital of 1 trillion VND by the end of 2008, and 3 trillion VND by 2010.
Compared to other stocks, the prices of bank shares have fallen drastically, with some traded under their face value despite high profits announced by many banks in the 3 rd quarter.
On the listing market, the prices of stocks of Asia Commercial Bank (ACB) and Saigon Thuong Tin Commercial Bank (Sacombank) - the two leading joint stock banks – dropped to only 27,800 VND and 18,300 VND per share, respectively, on Dec. 26.
On the over-the-counter (OTC) market, shares of commercial joint stock banks, such as the Import-Export, the Military and the Saigon-Hanoi, were traded under 20,000 VND each.
Experts say the situation causes difficulties for the mobilisation of capital from investors, including existing investors, especially in the context of domestic economic difficulties and adverse impacts of the global financial crisis.
To date, about 10 joint stock banks have charter capital of under 1 trillion VND. Most are striving to increase capital, considering it an effective measure to raise their capability and competitiveness.
The Dai A Bank finished the list of its shareholders and has begun subscription of capital in mid-December. The progress of capital subscription by shareholders of the Pacific Commercial Joint Stock Bank is also expected to complete on time.
The Kien Long Bank has completed the offering of nearly 42 million shares to its existing shareholders and staff members.
Meanwhile, shareholders of the De Nhat Bank have finished depositing money to purchase shares under a plan to increase the bank’s capital from 600 billion VND to 1,000 billion VND.
VNA
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