Sacombank is courting foreign institutions for new marriages after a string of institutional investors bailed out on this top-tier private bank.
The State Securities Commission (SSC) last week allowed Sacombank to lock its aggregate foreign ownership in the bank at 15 per cent until July 31, meaning foreigners on the local market can buy Sacombank shares limited to 15 per cent of the bank’s chartered capital. The move has opened the door for foreign institutions to step in.
According to the SSC’s stock market development division, Sacombank’s current foreign ownership is around 13-14 per cent. Under existing rules, foreign shareholding in a local bank is capped at 30 per cent.
In early March, Temasek Holdings sold 21.9 million Sacombank shares, equal to a 2.04 per cent stake in the bank, worth VND500 billion ($24 million). It was the fourth institutional shareholder to quit Sacombank, after Dragon Capital, ANZ and Refrigeration Electrical Engineering Corporation (REE) divesting a 8.17, 9.61 and 3.92 per cent stakes since last year.
A senior SSC official told VIR Sacombank planned to sell its treasury shares to foreign investors for a 15 per cent stake. Whether Sacombank will sell the shares, equivalent to a 15 per cent stake, to one foreign strategic investor or to several foreign institutions is unclear.
Sacombank chairman Dang Van Thanh said he “will not comment on the issue as Sacombank’s annual general meeting (AGM) is yet to be organised”. Sacombank’s AGM, scheduled to take place on May 26, is expected to be overshadowed by personnel issues following the bank’s dramatic changes in ownership structure.
There are allegations that despite Sacombank’s good health compared with its peers, the institutional shareholders abandoned the bank on concerns over its family-style management and poor corporate governance, especially internal lending.
A hostile takeover of Sacombank by Eximbank and its allies, the first of its kind in the history of Vietnam’s banking industry, is expected to bring fresh blood to the bank which might be a catalyst to whet potential foreign investors’ appetites.
Sacombank and Eximbank are Vietnam’s biggest private banks by chartered capital.
A source close to Eximbank said it and Sacombank have hammered out an agreement over the future composition of Sacombank’s board of directors. Accordingly, the new board will include 10 people, most of whom represent Eximbank’s alliance. Thanh and his son Dang Hong Anh are the only two old members who will have a seat in the new board.
Thanh will continue to be chairman of Sacombank for an additional period of time before he hands over the position to Eximbank and its allies, the large shareholder group. The Ho Chi Minh Stock Exchange recently announced that several key shareholders including Sacomreal, Bourbon Tay Ninh and Thanh Thanh Cong Company had registered to sell 80 million Sacombank (STB) shares.
These old key shareholders reportedly agreed to liquidate after new investors led by Eximbank accepted to pay at least VND35,000 ($1.68) a share, or 36 per cent higher than market prices, according to a reliable source, who declined to be named citing the sensitivity of the information.