HANOI: The Bank for Investment and Development of Vietnam (BIDV) will be listing 337 million shares that it had issued earlier, in exchange for shares of the Mekong Housing Bank (MHB) during the May merger. The listing is expected to happen within the next quarter, according to reports in the local media.
In addition to this, the country’s second largest bank has offered 270 million shares to existing shareholders. The purchased amount from this issuance will also be listed in the fourth quarter, BIDV’s deputy CEO Tran Phuong reportedly announced.
The state holdings, prior to the merger, were 91.26 per cent in MHB and 95.76 per cent in BIDV. Post merger, the holding is 95.28 per cent.
Merging with MHB has helped BIDV increase its charter capital to VND31.48 trillion ($1.4 billion), while the issuance of the 270 million shares, if successful, will further beef up the lender’s capital to nearly VND34.2 trillion.
The Vietnamese government aims to reduce its stakes in local commercial lenders to attract more foreign investment flow into banks. However, the state presence in those banks will be no less than 65 per cent. Meanwhile, BIDV had earlier said, it will sell 30 per cent stakes to foreign investors, including a strategic shareholder. The foreign ownership in BIDV is currently at only 1.88 per cent.
In April, DEALSTREETASIA reported that BIDV was in talks with eight foreign investors for the overseas partnership, a similar move to other major banking players like Vietcombank and Vietinbank. A number of Vietnamese banks have forged alliances with Japan’s lenders Mizuho Bank, The Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation.
According to local media reports, in case the Vietnamese central bank cashes out from BIDV to own 65 per cent, the free float rate of BIDV shares will rise from the current 4.7 per cent to 5 per cent, which is eligible to be a portfolio stock in the FTSE Vietnam Exchange-Traded Fund.
Although the free float rate has not yet reached the fund’s standard, the ETF has already picked BIDV stock in its quarterly review announcement on September 4. The constituent change will take effect on September 21.
While the ETF did not disclose the amount of BIDV shares it will purchase, several brokerage houses in Vietnam like Saigon Securities Inc and Viet First Securities Corp have predicted it will buy in some 13-14 million shares of the bank.
