VietinBank issuing Tier-2 Bonds 2019 to the public: Safe and effective investment choice
VietinBank has recently announced a tier-2 bond public offering in 2019 from August 15th, 2019 with total value up to 5,000 billion VND at par. The bonds are widely distributed at all transaction offices, branches of VietinBank or at the transaction offices of VietinBank Securities Company (VietinbankSC), who act as Issuing Agents of the offering for the Bank.
The purpose of issuing bonds is to improve capital capacity for the bank to ensure the safety limit ratios in accordance with the regulations of the State Bank of Vietnam (SBV). The par value of the bond is as low as VND 10,000,000 (Ten million dong) per bond with the aim to reach mass market, especially those are seeking a safe and long-term investment product (i.e. state-owned bank rating) but are still able to benefit from fluctuations in interest rates. Compared with a 12-month term deposit interest rate, VietinBank bonds are always higher with a margin of 1.0%-1.2%/year depending on the maturity.
Investors can choose between the bond term of 7 years or 10 years. In addition, VietinBank has the right to redeem entire bonds at the Redemption Date which is 2 (two) years after issuance (for the 7-year term bond) or 5 (five) years after issuance (for the 10-year term bond). Similar to passbook or other highly liquid assets, bondholders can pledge their bonds at VietinBank or any other accepted bank when they have demand for funding. Particularly in VietinBank, Bondholders can pledge VietinBank bonds as collateral to borrow with a maximum value up to 100% of bond value. VietinBank also offers attractive lending interest rates for bondholders, with the lending rates at some specific terms only equal to the bond coupon rate. Bondholders have the full right to transfer, sell, donate and inherit the bonds. These transactions can be executed easily through the wide network of VietinBank branches and Depository Agent - VietinbankSC.
Especially in 2019, customers who successfully register for VietinBank Bond 2019 will be eligible to participate in the promotion programmes including “Cash back” and “Lucky draw” when investing a high enough value. Accordingly, individual and institutional customers who invest from VND 200 million par value of VietinBank Bond 2019 will receive cash back immediately. Retail customers who buy more than 5 bonds will participate in the lucky draw programme with the opportunity to receive many other attractive rewards.
Besides the public offering, VietinBank is also actively seeking private placement. The bank has just recently announced a 3rd Tier-2 bond private placement from 7th August 2019 of VND500 billion.
VietinBank is the leading bank in issuing bonds to the public since 2017 with a strong reputation in settlement of interest and principal. VietinBank is currently the bank with the strongest shareholder structure with 64.46% of charter capital owned by the Government, 19.73% owned by MUFG (Japan's largest bank) and more than 8% owned by IFC International Finance Company (a member of World Bank).
VietinBank has a nationwide system with 155 branches and nearly 1,000 transaction offices, 2 representative offices and 2 branches in Germany and 1 bank subsidiary in Laos with advantages in outstanding information technology infrastructure. Currently, VietinBank is gradually implementing the restructuring plan in accordance with the Government's orientation and the SBV's approval, aiming at the goal to become one of two Vietnamese banks listing on international stock markets and being in the Top 100 biggest banks in Asia with sustainable, safe and efficient growth.
Accordingly, as of the end of the Q2/2019, VietinBank's business result showed positive growth over the same period in 2018 with vibrant shift in income structure. Net income from service activities increased by 63% and income from FX trading increased by 120% over the same period in 2018.
These outstanding figures are also the highest growth rate over the last 5 years. It is expected that in 2019, VietinBank's consolidated pre-tax profit will reach VND9,500 billion (of which, VietinBank’s separate pre-tax profit will reach VND9,000 billion).
Ranked number 242 in the 2019 Global Ranking of Brand Finance, VietinBank is the first Vietnamese bank listed in the Top 300 most valuable bank brands in the world in 2019 and seventh consecutive times in the Top 500 most valuable bank brands in the world. VietinBank’s rating stays at “BB-” for long-term debt issuer (Long-term IDR) and ceiling support from Government (SRF) by Fitch and this organisation also upgrades the Long-term IDR Prospect of VietinBank to "Positive". Moody Investor Services, Inc (“MIS”) has also upgraded the long-term local issuer ratings of VietinBank to Ba3.