VPBank to set FOL at 30 per cent after private placement

11:45 | 20/03/2018
VPBank (HSX: VPB) is looking to raise capital through a private placement in the upcoming months, then lift its foreign ownership limit (FOL) to 30 per cent and invite potential foreign investors to pay a premium price for its stakes, said the bank’s chairman at the annual general meeting (AGM) held on March 19.

The total shares on offer for both local and foreign investors, according to the Hanoi-based bank, will be a maximum of 15 per cent of the common stocks on record at the time of the private placement, which is to be held as soon as the end of the second quarter or early in the third quarter the latest. VPBank’s common stocks at present add up to 1.497 million shares.

vpbank to set fol at 30 per cent after private placement
VPBank expects to sell stakes to foreign investors at high prices

VPBank chairman Ngo Chi Dung noted at the AGM that, “The possibility for the stocks to find foreign investors is rather high, and the price will be higher than the current market price."

VPB was traded at VND63,400 ($2.88) on March 19.

According to Dung, upon the successful completion of the private placement, not only will the capital adequacy ratio (CAR) be boosted to 18 per cent, but also a considerable reserve will be set aside for the bank to carry out mergers and acquisitions (M&A) activities, which the bank could not do in the past five years due to a lack of capital.

“It is the right time for the private placement, as it corresponds with our needs and the demand to enhance our financial capability,” he said.

It is the right time for the private placement, as it corresponds with our needs and the demand to enhance our financial capability.

At the end of 2017, VPBank reported a total operating income of VND25.026 trillion ($1.137 billion), up 48 per cent on-year and contributing to a compound annual growth rate (CAGR) of 51 per cent for the period of 2012-2017.

Breaking down the revenue figure, 79 per cent came from the bank’s strategic segments that include retail banking, SME lending, household-based business lending, and consumer finance.

Income from retail banking, in particular, witnessed a growth of 66 per cent throughout the year, while SME lending and commercial banking reported 39 and 250 per cent growth. The consumer finance business under the bank’s subsidiary FE Credit, meanwhile, gained some 52 per cent in revenue growth over the year.

The lender’s net interest income reached VND20.614 trillion ($937 million), an increase of 36 per cent on-year. Pre-tax and post-tax profit were recorded at VND8.13 trillion ($369.54 million) and VND6.44 trillion ($292.72 million), respectively, growing some 65 and 64 per cent from 2016. Return on average assets (ROAA) stood at 2.54 per cent, compared to 2016’s 1.86 per cent.

VPBank’s total assets were reported at VND277.75 trillion ($12.63 billion) at the end of 2017, a growth of 21.4 per cent compared to the end of the year prior.

Its owners’ equity, meanwhile, soared to VND29.695 trillion ($13.49 billion) from the VND17.177 trillion ($7.8 billion) in 2016. Despite the increase in equity, the bank’s return on average equity (ROAE) was kept at 27.5 per cent.

Over the course of the year, VPBank’s charter capital increased by VND15.706 trillion ($713.9 million), from the VND9.181 trillion ($417.3 million) at the end of 2016. Its capital adequacy ratio sat at 14.6 per cent, in line with Basel II standards.

By Trang Nguyen

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