Listing ambitions of Vietnamese banks backed by leaders

VietABank has announced the agenda for its upcoming AGM, scheduled for late April. A key proposal involves the potential listing of all circulating shares on the stock exchange, subject to regulatory approval and favourable market conditions. The decision regarding listing on either the Ho Chi Minh Stock Exchange (HSX) or the Hanoi Stock Exchange (HNX) will be vested in the board of directors, which will also be empowered to oversee other listing-related matters.

Moreover, VietABank seeks approval to increase its charter capital by approximately $88 million, equivalent to 39 per cent, through the issuance of shares to distribute dividends from retained earnings and bolster legal capital reserves.

The projected increase in charter capital, subject to regulatory consent, is set to augment VietABank’s financial footing. It has set ambitious financial targets for 2024, including a pre-tax profit goal of around $44 million and an asset growth target of 4.3 per cent.

Likewise, during its recent AGM, ABBank shareholders voiced inquiries concerning the bank’s listing roadmap. In response, chairman Dao Manh Khang articulated the bank’s ambition to list its shares on the HSX, aiming to optimise market capitalisation and enhance transparency. Key stakeholders, including the International Finance Corporation and Maybank, have echoed the importance of transparent governance.

“I fully support the listing objective. A listing will not only elevate stock value but also instil greater investor confidence in the bank. However, prevailing conditions this year present challenges to the listing process,” said Khang. “In our 5-year roadmap aimed at achieving a market capitalisation of $3 billion, relying solely on organic growth won’t suffice. To this end, McKinsey will collaborate with us to implement this strategic roadmap.”

Beyond individual bank strategies, there is a broader trend towards stock exchange listings among Vietnamese banks.

Earlier this month, Nam A Bank (NAB) marked its debut trading session on the HSX. It was the sole banking entity to secure the HSX’s approval for listing in 2023, thereby expanding the total count of listed banks on the exchange to 18.

“The listing of both public firms at large and specifically Nam A Bank is a pivotal stride in our growth trajectory. The listing of NAB shares will not only streamline capital attraction and foster business expansion but also fortify shareholder value and foster sustainable bank development,” said CEO Tran Ngoc Tam.

Alongside the capital augmentation initiative, the bank’s latest AGM green-lit the issuance of convertible bonds, with a ceiling of $100 million, scheduled for either 2024 or 2025, with a maximum bond tenure of five years.

Furthermore, shareholders endorsed the continued pursuit of establishing a wholly owned Nam A Bank or an overseas branch, strategically focusing on Southeast Asian markets.

Currently, the domestic stock market hosts seven banks on the Unlisted Public Company Market, including VietABank, ABBank, Kienlongbank, Vietbank, PGBank, SaigonBank, and BVBank.

Last year, ABBank, Vietbank, Kienlongbank, Nam A Bank, and BVBank unveiled plans to list their shares on either the HSX or the HNX. Of these, only Nam A Bank successfully listed its shares on the former, while Kienlongbank withdrew its application. The others are yet to finalise their listing arrangements.

Meanwhile, VietDragon Securities CEO Nguyen Thi Thu Huyen revealed last week that the final testing day for the second phase of the Korean Exchange (KRX) technology at the HSX was April 9. While the technology system is nearing operational readiness, its current functionality is confined to system aspects, pending the implementation of new products.

“If there are no changes, the KRX system will be operational by early May,” Huyen said.

The impending implementation signifies a significant advancement for the market, potentially prompting banks to consider listing on HSX as part of their growth strategies.