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Vietnam’s fourth largest bank raises $64 million in IPO
State-owned Vietinbank, Vietnam's fourth-largest lender by assets, raised US$64 million by selling a 4 percent stake in an initial public offering (IPO) last week, according to the Ho Chi Minh Stock Exchange.
Vietinbank sold 53.6 million shares at an average price of VND20,265 ($1.20) each in an auction held last Thursday, about 1.3 percent above the auction start price of VND20,000.
Bank Chairman Pham Huy Hung said the number of bids exceeded the total amount of available shares making the IPO a big success. Figures from the exchange show the amount of bids for shares in the bank reached 55.9 million, compared to 53.6 million available shares.
“Investors believe Vietinbank will fare well even when the market is in a downward trend,” Hung said, adding that the shares will begin trading on the HCMC exchange in April.
Vietinbank, or Vietnam Bank for Industry and Trade, forecast earlier this month its net profit will nearly double next year to VND2.2 trillion ($133 million) as its total assets will grow 26 percent to VND263.48 trillion ($15.7 billion) by the end of 2009.
The Hanoi-based bank has projected its 2008 full year net profit to rise 7.8 percent to VND1.24 trillion ($74 million), according to the prospectus for the bank's initial public offering.
Vietinbank has said it planned to sell a combined 10 percent stake to one or two foreign institutional investors through another auction.
Vietnam now caps foreign ownership in its banks at 30 percent, with foreign banks usually owning 10 percent, with a 15 percent limit for a strategic investor, who could expand the holding to 20 percent subject to government approval.
Only HSBC currently has a 20 percent stake, in Hanoi-based unlisted Techcombank, while nine other banks including Standard Chartered, ANZ, SMFG and Deutsche Bank have bought 10-15 percent stakes in other Vietnamese banks.
Vietinbank has said apart from the 4 percent offered in the IPO, it will sell 1.7 percent to employees, 1 percent to the labor union and 3.3 percent to domestic strategic investors. The bank has been allowed to sell a total of 20 percent of its shares.
Cat Tri
Reuters
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