Monday, October 22 2018

VietNamNews

Vietcombank offloads MB shares to meet central bank requirement

Update: September, 14/2018 - 15:29
Vietcombank will put 53.4 million shares of MB up for auction on October 12. — VNA/VNS Photo
Viet Nam News

HÀ NỘI — Vietcombank will divest part of its holding in Military Bank (MB) next month to meet the State Bank of Việt Nam (SBV)’s regulation on holding shares at other credit institutions.

According to an announcement by the Hà Nội Stock Exchange, Vietcombank will put 53.4 million shares of MB up for auction on October 12 at a starting price of VNĐ19,641 (84 US cents) apiece.  

If the divestment succeeds, Vietcombank will earn at least VNĐ1.5 trillion (US$63.29 million).

The divestment will help the bank reduce its holdings at MB from the current 6.97 per cent to 4.5 per cent, equal to 97.1 million shares, to meet the SBV’s regulation. Offloading holdings at MB is one of Vietcombank’s moves to comply with the central bank’s Circular 36, which allows commercial banks to hold shares in a maximum of two other credit institutions, with the stake in each not exceeding 5 per cent of the total charter capital of that institution.

Earlier, Vietcombank also divested all holdings at Orient Commercial Bank (OCB). The bank will also have to offload shares of Eximbank, where it still holds 8.19 per cent of charter capital.

Holding 4.5 per cent of MB’s charter capital means that Vietcombank will still gain from the prospects of the institution. It is also understandable as MB is considered among several local banks as having the safest finance indicators. The bank’s capital adequacy ratio (CAR) stands at 12 per cent, much higher than the central bank’s requirement of 8 per cent, while its non-performing loan ratio is low at 1.29 per cent against the central bank’s cap of 3 per cent.

MB has also reported consolidated profits of about VNĐ3.8 trillion ($165.2 million) in the first half of this year, beating its yearly profit of VNĐ3.6 trillion registered in 2017. According to the bank, the impressive result comes thanks to success in its bancassurance (selling insurance products through banks) and consumer finance businesses.

The Ho Chi Minh City Securities Corporation has valued MB shares at VNĐ32,800 while the value appraised by Viet Dragon Securities Company is at VNĐ30,500.

MB share on Friday morning closed at VNĐ22,650 on the HCM Stock Exchange, down 0.7 per cent against the previous session. — VNS

 

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