BIDV to launch IPO this year

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SaigonTimes English - 39 month(s) ago 15 readings

HCMC – Bank for Investment and Development of Vietnam (BIDV), Vietnam’s second biggest bank in terms of assets, is preparing for its initial public offering (IPO) in the year’s last quarter, said the bank’s chairman Tran Bac Ha.

BIDV to launch IPO this year

By Hong Phuc - The Saigon Times Daily

HCMC – Bank for Investment and Development of Vietnam (BIDV), Vietnam’s second biggest bank in terms of assets, is preparing for its initial public offering (IPO) in the year’s last quarter, said the bank’s chairman Tran Bac Ha.

Under its equitization plan being processed by relevant ministries and the central bank, BIDV has carried out the corporate evaluation, built the IPO plan, and set out criteria for choosing foreign strategic investors, Ha continued.

BIDV also strived to conclude the issue of shares to strategic partners within 2011 if market conditions are favorable. The bank expects to fulfill legal formalities so as to officially convert itself into a joint stock commercial bank in the first quarter of 2012.

According to the bank’s equitization proposal endorsed by the Prime Minister, the time chosen for evaluating the bank was December 31, 2010 while the launch of IPO would be carried out in tandem with the selection of foreign strategic investors in 2011. It will be advised by Morgan Stanley in its evaluation process as well as in selecting strategic investors.

The bank planned to keep its current State capital unchanged and issue more shares to spur its working capital, but the State will still own the controlling stake of at least 51%. Its shares will be sold in phases, and the stock will be listed on both the local bourse and overseas stock exchanges, according to the bank’s equitization plan.

The launch of its IPO before or after selling shares to strategic partners will depend on the Government’s approval. As planned for the first stage, the Government will hold a stake of 80%, while shares equivalent to 15% will be issued to foreign strategic and financial investors, 1% to staff, 1% to the bank’s labor union, and 3-5% to other shareholders via the IPO.

Lately, BIDV has equitized its offshoots BIDV Securities Company and BIDV Insurance Company, as well as merging its two finance leasing companies.

According to the consolidated financial statement audited under the Vietnam Accounting Standards, BIDV as of end-2010 had total assets of VND366.26 trillion. Its outstanding loans reached VND254.2 trillion compared to total mobilized capital of VND251.92 trillion.

The bank obtained a pre-tax profit of VND4.62 trillion in 2010 while its return on assets (ROA) and return on equity (ROE) were 1.13% and 17.96% respectively.

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