BizLIVE - The sales are meant to meet requirements of the central bank’s Circular 36, which aims to limit cross holdings in the banking system.
Vietcombank to Divest Stakes in Saigonbank, Finance Firm to Meet Requirement
The headquarters of Vietcombank in Hanoi.
Hanoi-based Bank for Foreign Trade of Vietnam (Vietcombank) has announced that it has received regulatory approval to sell its entire stakes in Saigonbank and Cement Finance Company (CFC) to comply with a central bank regulation.
The bank will put up for auction 13.2 million shares, or 4.3% stake, in Saigonbank at a starting price of 12,550 dong ($0.55) apiece and 6.6 million shares, equivalent to a 10.91% stake, in CFC at an initial price of 11,549 dong each.
The auctions are scheduled for November 20, Vietcombank said.
If things go smoothly, the bank will fetch at least 242 billion dong ($10.6 million) from the sales.
The sales are meant to meet requirements of the central bank’s Circular 36, which aims to limit cross holdings in the banking system. A bank is allowed to keep holdings in other two credit institutions at most.
Besides CFC and Saigonbank, Vietcombank (VCB) currently holds an 8.19% stake in Eximbank (EIB), 7.16% in Military Bank (MBB), and 4.72% in Orient Commercial Bank (OCB).
At an annual general meeting in April 2017, Vietcombank Chairman Nghiem Xuan Thanh said that that bank was having difficulty divesting its stakes from Saigonbank, OCB and CFC due to low bidding prices.
In the nine months through September, Vietcombank earned a net profit of 6.3 trillion dong, up 25% from the same period last year.
Its non-performing loans accounted for 1.15% of total credit as of September, down from 1.51% in December 2016.

TUAN MINH