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BIDV to become commercial joint stock bank
The state-run Bank for Investment and Development of Vietnam, better known as BIDV, will officially become a commercial joint stock bank, operating in the form of a financial-banking group, in May.
This is considered “a comprehensive revolution” in the bank’s reforming process, said the bank.
On April 23, 2012, the State Bank of Vietnam (SBV) issued an 84/GP-NHNN license for the establishment and operation of BIDV commercial joint stock bank.
The commercial Bank for Investment and Development of Vietnam is established on the basis of stock and conversion of the state-run version of the bank.
With this new development, three of the five biggest lenders in Vietnam have been equitized, while only the Bank for Agriculture and Rural Development of Vietnam (Agribank) and Mekong Housing Bank remain 100 per cent state-owned.
At present, the 55-year-old lender is completing necessary procedures to establish a parent company, BIDV Financial Co, for conducting ownership functions for managing and investing the state-owned capitals in the subsidiaries under the financial-banking group form.
In related news, as of April 19, the bank was reported to reach a credit growth rate of 4.1 per cent from the beginning of the year.
According to statistics released by BIDV, outstanding loans as of April 19 were posted at VND154 trillion ($7.4 billion), while outstanding credit increased by an additional VND11.34 trillion.
Of which, from April 12, the total lending amount was reported at VND9.24 trillion, while outstanding credit increased by an additional VND1.84 trillion, after the central bank lowered the lending rates.
In addition, from May 1 BIDV will take part in the credit package of VND4 trillion for individuals and households to purchase houses in projects funded by BIDV with lending rates of 16 per cent per year. The lending period may last for up to 15 years.
BIDV’s IPO, a part of its equitization process was managed by Morgan Stanley via the Ho Chi Minh Stock Exchange on December 28, 2011, succeeded with more than 84.7 million shares sold to the public.
Since the equitization, BIDV has chartered capital of VND23 trillion with a 99-year operation period starting from April 2012 after the new licensing of the central bank.
In December, 2011 credit rating firm Moody’s assessed the equitization plan of BIDV as credit positive, helping the bank improve its capital base and adequacy and bringing positive structural changes while enhancing its financial and management transparency.
The participation of foreign strategic investors will also help the bank retain independent supervision to improve its corporate governance practices and obtain support in terms of risk management and product development, it said.
Under the plan previously approved by the Prime Minister, BIDV will sell a 15-per cent stake to foreign strategic investors in 2012, another 3 per cent stake through the IPO in the domestic stock market, and then sell 1 per cent of preferential shares to the bank’s staff and 3 per cent to its labor unions.
The Vietnamese Government will reduce its holding in BIDV from 100 per cent to 78 per cent after finalizing the transaction, and to 65 per cent of stakes by 2015.
In early December 2011, a BIDV spokesperson told a news briefing in Hanoi that the band had gotten the nod from the Government to fix the starting share price at VND18,500 for its forthcoming IPO.
The nation’s second biggest bank by assets will become the third largest State-owned bank to undergo equitization this year, after the Bank for Foreign Trade of Vietnam (Vietcombank) and the Vietnam Bank for Industry and Trade (VietinBank).
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