Vietcombank will not get the nod to issue shares in order to increase its charter capital until the bank finds a strategic foreign investor.
"The message was implied in a document sent to Vietcombank from the State Bank of Viet Nam in a reply to our charter capital proposal," the bank Chairman Nguyen Hoa Binh told VietNamNews, adding that the bank would work more with the central bank with the charter capital plan.
"Maybe, Vietcombank can’t execute the plan this year, however, we will try our best to make it as soon as possible next year," said Binh.
Governor Nguyen Van Giau was not available for immediate comments.
In the proposal, Vietcombank said that it would issue nearly 112.3 million additional shares to existing shareholders as part of its plan to increase its charter capital this year. Existing shareholders will be eligible to buy additional shares at their face value of VND10,000 each, with a ratio of 9.28 shares per every 100 currently held.
Following the stock split, the bank will increase its charter capital from its current holdings of VND12.1 trillion (US$672.2 million) to VND13.2 trillion ($734.6 million).
The bank planned to spend VND500 billion ($27.7 million) in order to promote credit sources and another VND323 billion ($17.9 million) would be used for infrastructure enhancements, which would include constructing technical systems and improving human resources.
Vietcombank has targeted VND246.36 trillion ($13.7 billion) in total assets by the end of this year, bad debts of under 3.5 percent of total outstanding loans, and a profit of VND3.32 trillion ($184.4 million).
In the first 11 months of this year, Vietcombank posted a pre-tax profit of VND4.4 trillion ($237.8 million), which was 29.4 percent higher than the previously set target for the entire year. Earnings from lending have accounted for 60 percent of the bank’s total revenue.
The Ha Noi-based bank was the first State- owned bank to go public and was followed by Vietinbank, which made its initial public offering (IPO) on December 26, 2007. Vietinbank sold out 97.5 million shares at an average price of VND107,860 ($6.70) per share.
The shares sold in the IPO represent 6.5 percent of the equity in the bank.
The bank will search for two foreign strategic investors.
The plan has been in development for the past two years.