Vietinbank Plans 25 per cent Stake Sale in IPO

Vietnam Industrial and Commercial Joint Stock Bank (Vietinbank) is seeking government approval for its plan to sell a 25 per cent stake to domestic and foreign investors in the upcoming initial public offering, Vietnam Economic Times quoted Vietinbank Chairman Pham Huy Hung as saying.

 

The bank, which will offer the shares at a starting price of VND100,000 each, aims to raise its registered capital by 25 per cent to VND13 trillion (US$812.5 million), Hung said.

 

The exact time for the IPO, however, was not decided as the privatization of such a big state-owned bank will have great influence on the equity market.

 

Vietinbank has also hurried to complete procedures to sell shares in its offshoots, joined hands with some strategic partners to set up new firms in financial and banking sector in a bid to raise its operation efficiency after privatization, Hung said on the newspaper.

 

After the IPO, Vietinbank's total assets are expected to reach VND180 trillion, in which the state holds VND10 trillion. Hung revealed that the lender plans to sell another 24 per cent stake to public by 2010 to reduce the state ownership to 51 per cent.

 

In 2007, the Hanoi-based bank reported its pretax profit rose 83.5 per cent to VND1.5 trillion and total assets grew 24 per cent to VND175 trillion, accounting for 15 per cent total assets of the whole industry. Its bad debt was controlled at 1.02 per cent.

 

JP Morgan has been selected as the privatization consultant of Vietinbank in its IPO.

 

The bank is among five banks, which are included in 104 state-owned enterprises Vietnam will sell shares from now to 2010, Prime Minister Nguyen Tan Dung said earlier this year. (Vietnam Economic Times)