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VPBank divests subsidiaries in quest to find strategic partner
The Vietnam Prosperity Bank (VPBank) has announced its plan to sell stakes to a strategic partner and divesting two subsidiaries, namely VP Bank Securities Company (VPBS) and VP Bank Financial Companies (VPBFC).
The moves are aimed to increase the mother bank’s chartered capital and improving the effectiveness of investment in the two subsidiaries.
Up to 30 per cent of the current stakes will be sold to foreign financial institutions, which is equal to 20 per cent of VPBank’s new total chartered capital. The bank said that it had been seeking for new strategic investors over the past two years.
Since 2013, when Singapore-based Overseas Chinese Banking Corporation Ltd. (OCBC) withdrew its investment from VPBank, not a single share has been sold.
Pursuant to Vietnamese legislation, foreign strategic shareholders of Vietnamese commercial banks must have at least five years of operation in the banking sector and total assets of at least $20 billion a year before transaction.
Currently being the sole owner of VPBS, the VPBank plans to sell 86.3 million shares, equivalent to 89 per cent of the stakes, keeping only the remaining 11 per cent after the divestment. The sale is expected to be conducted shortly or in the first quarter of next year.
The past three years have seen VPBS’s earnings fluctuating heavily, with after-tax profit standing at VND60.8 billion in 2012, VND128 billion in 2013 and VND41 billion in 2014.
Besides, the return on equity ratio (ROE) ranged from over 4 per cent to 16 per cent, which was generally lower than the average 15 per cent of the whole VPBank system.
The mother bank has also announced to divest a 50 per cent share from VPBFC, which it acquired from the Vietnam National Coal-Mineral Industries Holding Corporation last year. Of this, 49 per cent shall be transferred to a strategic foreign partner and the other 1 per cent shall be offered to a local company.
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