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Vietnam Business » Vietnam Banking News » Vietcombank to sell stake in Eximbank

Vietcombank to sell stake in Eximbank

The deal will lower Vietcombanks share ownership in the HCM City-based bank (coded EIB on the HCM City Stock Exchange) to 6.93 per cent, Hoa said. The sale will be executed via order-matching or negotiation between Friday of this week and October 10, confirmed the HCM City Stock Exchange. The divestiture follows Vietcombanks sale of 5 million EIB shares last month.

Vietcombank will sell 5 million shares it holds in Eximbank, representing a 1.26-per-cent stake, as part of its effort to restructure its investment portfolio and meet stricter capital adequacy ratio (CAR) requirements, Vietcombank management board member Le Thi Hoa told Viet Nam News yesterday, August 11. "Dont be too serious about these deals," Hoa said. "Buying or selling shares is normal. Eximbank shares have a high potential and high liquidity, and our investment principle is not to put all of our eggs in one basket." Vietcombank, as a State-owned bank, was originally instructed to invest in Eximbank to assist the struggling bank to avoid insovlency back in 2000, when Eximbanks bad debt was two- or three-times its charter capital. At that time, the Government directed Vietcombank to buy a 20-per-cent stake in Eximbank at a cost of VND50 billion (US$2.63 million). "Vietcombank intended to sell its EIB shares in 2006-07 when Eximbank began to turn a profit, but Eximbanks executive board asked us to stay longer," Hoa said. Excluding State-owned banks, now Eximbank leads all commercial banks in capital, with a charter capital of VND13 trillion ($684 million). The bank also has a foreign strategic investor, Japans Sumimoto Mitsui Banking Corporation. "Our mission is over," Hoa said. "Now we have to manage to raise our own CAR from 8 to 9 per cent and increase our equity." Vietcombank continues to hold stakes in Military Bank, Orient Bank, and Gia Dinh Bank. It earlier sold 19 per cent of its stake in Gia Dinh Bank, cutting its share of ownership to 11 per cent. Vietcombank currently has charter capital of VND13.2 trillion ($688.7 million), and it posted a first-half profit of VND2.8 trillion ($145.8 million), up 7.3 per cent against the same six months of last year. Net income from non-credit services was up 15 per cent to a total of VND475 billion ($24.7 million). The Ha Noi-based bank has increased its risk provision to 39.6 per cent against the first half of last year to VND350 billion ($18.2 million) and had total assets as of June 30 worth VND246.3 trillion ($12.8 billion). Vietcombank chairman Nguyen Hoa Binh told Viet Nam News that he was very pleased and believed that Vietcombank would be able to beat its target of VND4.5 trillion ($234.4 million) in profits by years end. Vietcombank shares, coded VCB on the HCM City Stock Exchange, closed up 0.29 per cent yesterday to VND34,800 per share, while EIB shares closed down 1.71 per cent to VND17,200.

Vietnam Business And Financial News Network. Source [english.vietnamnet.vn]

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