VIB Bank plans to put its shares into transaction on UpCom in early 2017. However, the room for foreign investors will be nearly filled after the listing.
Commonwealth Bank of Australia, the strategic shareholder, now holds 20 percent of VIB Bank shares. Since the bank decided that foreign investors will hold 20.5 percent of its stakes at maximum, there is only 0.5 percent of stakes to buy.
Analysts believe that VIB Bank wants to reserve the 9.5 percent of stakes for potential strategic shareholders or potential financial investors (under the current regulations, foreign investors can hold up to 30 percent of stakes of Vietnamese banks).
| Though three more banks will list shares on the UpCom market early next year, foreign investors have few opportunities to invest in Vietnamese banks. |
Techcombank has got approval to put 887.8 million shares into transactions on UpCom. However, there are not many opportunities for foreign banks to obtain shares.
As HSBC, the strategic partner, now holds 19.41 percent of Techcombank’s stakes, the bank only has 10 percent of stakes to sell to foreign investors.
As for listed banks such as MB, the room for foreign investors has also been filled. Vietcombank and VietinBank are seeking permission from state management agencies to lift the foreign ownership ratio ceiling to over 30 percent.
Of the three banks to list shares on UpCom, VP Bank is the only bank which still can open its doors to foreign investors.
Vietnamese banks
All Vietnamese banks, including the most prestigious ones, have their weak points.
The risk of Techcombank, which is considered one of the best banks, lies in the high proportion of consumer lending, especially the loans to fund house purchases.
The bank reported the non-performing loan (NPL) of VND2.458 trillion in the first nine months of the year, an increase of VND1.862 trillion compared with the end of 2015. This included VND1.438 trillion worth of fifth-group debts, an increase of VND400 billion over the end of 2015.
Techcombank’s shares traded at VND11,000 on OTC market
The high consumer lending proportion is also a risk for VP Bank. The finance report showed that the NPL ratio of the bank alone had reached VND2.383 trillion by the end of the third quarter, or 2.35 percent of outstanding loans. Meanwhile, the NPL ratio of FE Credit, a subsidiary of the bank, had reached VND1.629 trillion, or 5.69 percent.
After OCBC withdrew capital in late 2013, VP Bank began seeking foreign investors.
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Mai Chi
