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Vietcombank approved to list shares   2009-04-03 - Viet Nam News

Part-equitised Vietcombank has won approval in principle to list on the HCM City Stock Exchange without first having sold 20 per cent of its shares to the public.

Government Decree 14/2007/ ND-CP of January 2007 had delayed the listing since the commercial bank's Initial Public Offering in December 2007.

The decree stipulates that an enterprise can list shares only after at least 20 per cent of it has been sold to at least 100 investors.

Vietcombank is believed to have received a waiver from the Government before applying for permission to list.

The Ha Noi-based bank, which will be the first enterprise allowed to contravene the rule, submitted an application to list shares on the HCM City Stock Exchange, HOSE, on December 31, 2008.

It will be allowed to list the equitised 9.28 per cent of its charter capital or more than 112.28 million shares.

Vietcombahk's Chairman Nguyen Hoa Binh told Viet Nam News shareholders would decide the date for the listing at a shareholder meeting on April 28.

Long story

"The equitisation of Vietcombank has been a long story and we don't want to talk too much about it before listing," he said.

But some more administrative procedures were still to be completed and the bank's in house brokerage, Vietcombank Securities, would serve as listing consultant.

Vietcombank Securities representative Nguyen Thi Bich Lien said: "We are working on the listing plan and it's too soon to say anything." Vietcombank has been seeking one or more foreign strategic investors for more than a year. But failure to negotiate an acceptable price for its shares and the onset of global financial crisis have delayed its plans to list with the stock exchange.

Its executives have set the challenging profit target of VND3.35 trillion (US$189.26 million) - the same as last year for 2009 with credit growth of about 18 per cent compared with 16.4 per cent in 2008.

It's also planned to reduce the bank's bad debt ratio from 4.5 per cent to less than 3.5 per and pay a cash dividend of not less than 12 per cent of face value - the same as last year.

New offices

The bank plans to open 60-70 new transaction offices and 11 branches to take the total to about 415 by year's end.

Vietcombank shares have fallen 70 per cent from their initial auction price of VND107,860 ($6.10) to about VND30,000-40,000 ($1.70-2.26) on the over-the-counter trading since its IPO.

"I'm eager to buy Vietcombank shares on the exchange," said VNDirect Securities investor Nguyen Huu Vinh yesterday.

"Fortunately, I didn't buy shares with its IPO because the price was too high. It's more reasonable now - equal to shares in Asia Commercial Bank which is one I favour."

Long-term investor Do Dang Tu added: "The State will still hold a major stake at Vietcombank, so owning its shares are likely to carry less risks than other private banks."

But some investors worried about the bank's potential dividend.

"Twelve per cent on face value is rather low when some other private big banks pay much more," said Bao Viet Securities investor Xuan Huong.

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