Business

HDBank keeps foreign ownership cap at 21.5 percent

Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) has decided to lock the foreign ownership limit at 21.5 percent of the charter capital.
HDBank keeps foreign ownership cap at 21.5 percent ảnh 1An HDBank office in Hanoi (Photo: VNA)

HCM City (VNA) – Ho Chi Minh CityDevelopment Joint Stock Commercial Bank (HDBank) has decided to lock theforeign ownership limit at 21.5 percent of the charter capital.

Thelimit was set at 21.5 percent so that there is more room to sell stakes to strategicinvestors, HDBank said in a statement on September 7.

Underexisting regulations, foreign ownership limit at banks is 30 percent of thecharter capital.

HDBankalso plans to offer 160 million USD worthof international convertible bonds to institutional investors in developedmarkets.

Thebonds will mature in five years and one day. The bonds can be converted intocommon shares, are non-guaranteed and go without covered warrants.

Incomeraised from the bond sale will be spent increasing the bank’s tier 2 capital.Tier 2 refers to a bank's supplementary capital and includes undisclosedreserves, debts and hybrid financial products.

Withthe capital raise, HDBank will increase funding for medium-term and long-termloans and reach its business targets. In addition, the bank will be able tomeet requirements of asset quality and capital adequacy ratio.

Amidthe COVID-19 pandemic, rating agency Moody’s has kept its B1 rating for HDBank,acknowledging that the Vietnamese lender has progressed well to improve thequality of assets and capital competency, and make sustainable profitability./.
VNA
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