State banks outline plans to go public
HCM CITY— State-owned commercial banks are preparing for equitisation as Viet Nam continues its move into the world economy.
According to Tran Bac Ha, the general director of the Bank for Investment and Development of Viet Nam (BIDV) his equitisation plan will be completed this year.
"Though the plan will be completed this year, it’s not easy to equitise such a big bank that runs a countrywide network," Ha said to a local newspaper. BIDV has a legal capital of VND3,65 trillion (US$330 million). He added that equitisation of State owned banks still has to wait for specific guidelines from the Government and the State Bank of Viet Nam.
He says this year two affiliates of his bank, the BIDV Financial Leasing Company and Securities Company, will be turned into joint stock ventures. He stopped short of disclosing the percentage of public to State stock options.
The leasing arm of the company has a legal capital of VND150 billion while the securities division is capitalised at VND100 billion.
The Bank for Foreign Trade of Viet Nam (Vietcombank) plans to follow suit. General Director Vu Viet Ngoan says his bank will begin the equitisation process with some undisclosed member companies. The bank’s legal capital is around VND3 trillion.
Ngoan thinks turning State owned banks into joint stock ones is a vital key to competing in a global economy. Public sales and international financial institutions will help increase the legal capital of the State owned banks. Currently State owned banks are small compared with foreign banks, with their rate of legal capital on total capital standing at around 4 per cent, or half of the international standard. And further, foreign financial institutions as shareholders will contribute their experience to the bank management.
However it is likely that the State will still be the dominant stakeholder in the equitised banks as they are major businesses.
When the Viet Nam Dairy Products Corporation (Vinamilk) carried out its own equitisation last year, the State allowed it to sell only 20 per cent of its VND1.5 trillion shares while holding the remaining 80 percent. — VNS
