Techcombank was listed on the bourse at 128,000 VND per share early this month (Photo: VNA) Hanoi (VNS/VNA) - Healthy domesticbanks should focus on improving the transparency in their audited financialstatements to attract foreign investors as some banks have recently succeededwith the strategy, experts suggested.
Recently, the market has seen the shares ofsome banks, such as Techcombank and VPBank, draw large interest from foreigninvestors.
At the beginning of June, the stock marketwitnessed one of the hottest listings in 2018 with great attention by foreigninvestors when Techcombank (coded TCB) listed on the bourse at 128,000 VND (5.61USD) per share.
Techcombank CEO Nguyen Le Quoc Anh attributedthe deal’s success to the bank’s efforts in improving the transparency in itsaudited financial statements.
According to Anh, Techcombank started toprepare for the listing three years ago, and the bank only targeted majorforeign investors.
The first thing the bank did to implementthe plan was to prepare its financial statements in 2015, 2016 and 2017 in linewith the international financial reporting standard, Anh said, adding that thebank had invited professional international organisations to review its entireoperation process and legal basis to ensure its best compliance.
According to industry insiders, theregistration to purchase Techcombank shares from foreign funds was huge withpositive prices, thanks to the implementation of the highest internationalstandards in the sales plan to prove the bank’s quality.
The improvement in its financial statementhad also helped Techcombank receive an investment of 370 million USD from twofunds managed by the US-headquartered private equity firm, Warburg Pincus.
The same development was also seen atVPBank (coded VPB). The bank’s shares were successfully listed on HCM CityStock Exchange at 39,000 VND (1.7 USD) apiece, exceeding Vietcombank andbecoming the most expensive and hottest bank stock in the country’s stockmarket last year.
At that time, the market was concerned withone question: Whether VPB shares were listed at too high a price? However,thanks to the information and operation transparency as well as to efforts ininvestor relations, the bank successfully attracted large foreign investors.
Richard Fitton, head of the Investment Bankdivision of the Viet Capital Securities Company, which was the listingconsultant for VPBank, told tinnhanhchungkhoan.vn that international investmentfunds spent at least a month to analyse the financial and operational situationof VBBank before deciding to invest in its shares.
More transparent, more attractive
Banking expert Nguyen Tri Hieu said notonly in Vietnam but in almost all other countries around the world, allfinancial statements of banks and businesses were independently audited by theworld’s leading companies. Financial statements with transparent, clear anddetailed information, especially in explanation and clarification, attractinvestors as it creates confidence in them, he added.
However, Hieu noted that while the abovestandards were popular in the world, financial statements in Vietnam werenormally inadequate, especially when it came to explanation aboutnon-performing loans, debt classification, loan loss provision and bad debtrecovery, which foreign banks and investors put great attention to.
VPBank, Techcombank and some other localbanks have paid attention to making their financial statements transparent andthorough and have not hidden important facts, which contributed to building thebank’s prestige and attracting the attention of foreign investors, Hieu said.
As many banks are planning to list on thestock market to increase capital to meet the central bank’s requirement on capitaladequacy ratio under Basel II standard, Hieu suggested that healthy banksshould focus on transparency in their financial statements to keep their stockprice at the right value, which may also give large added value.
The State Bank of Vietnam (SBV) governor LeMinh Hung said to help investors better understand the condition of banks, SBVwill ask financial organisations in near future to make their periodicallyaudited financial statements public and list them on the stock market.-VNA
Recently, the market has seen the shares ofsome banks, such as Techcombank and VPBank, draw large interest from foreigninvestors.
At the beginning of June, the stock marketwitnessed one of the hottest listings in 2018 with great attention by foreigninvestors when Techcombank (coded TCB) listed on the bourse at 128,000 VND (5.61USD) per share.
Techcombank CEO Nguyen Le Quoc Anh attributedthe deal’s success to the bank’s efforts in improving the transparency in itsaudited financial statements.
According to Anh, Techcombank started toprepare for the listing three years ago, and the bank only targeted majorforeign investors.
The first thing the bank did to implementthe plan was to prepare its financial statements in 2015, 2016 and 2017 in linewith the international financial reporting standard, Anh said, adding that thebank had invited professional international organisations to review its entireoperation process and legal basis to ensure its best compliance.
According to industry insiders, theregistration to purchase Techcombank shares from foreign funds was huge withpositive prices, thanks to the implementation of the highest internationalstandards in the sales plan to prove the bank’s quality.
The improvement in its financial statementhad also helped Techcombank receive an investment of 370 million USD from twofunds managed by the US-headquartered private equity firm, Warburg Pincus.
The same development was also seen atVPBank (coded VPB). The bank’s shares were successfully listed on HCM CityStock Exchange at 39,000 VND (1.7 USD) apiece, exceeding Vietcombank andbecoming the most expensive and hottest bank stock in the country’s stockmarket last year.
At that time, the market was concerned withone question: Whether VPB shares were listed at too high a price? However,thanks to the information and operation transparency as well as to efforts ininvestor relations, the bank successfully attracted large foreign investors.
Richard Fitton, head of the Investment Bankdivision of the Viet Capital Securities Company, which was the listingconsultant for VPBank, told tinnhanhchungkhoan.vn that international investmentfunds spent at least a month to analyse the financial and operational situationof VBBank before deciding to invest in its shares.
More transparent, more attractive
Banking expert Nguyen Tri Hieu said notonly in Vietnam but in almost all other countries around the world, allfinancial statements of banks and businesses were independently audited by theworld’s leading companies. Financial statements with transparent, clear anddetailed information, especially in explanation and clarification, attractinvestors as it creates confidence in them, he added.
However, Hieu noted that while the abovestandards were popular in the world, financial statements in Vietnam werenormally inadequate, especially when it came to explanation aboutnon-performing loans, debt classification, loan loss provision and bad debtrecovery, which foreign banks and investors put great attention to.
VPBank, Techcombank and some other localbanks have paid attention to making their financial statements transparent andthorough and have not hidden important facts, which contributed to building thebank’s prestige and attracting the attention of foreign investors, Hieu said.
As many banks are planning to list on thestock market to increase capital to meet the central bank’s requirement on capitaladequacy ratio under Basel II standard, Hieu suggested that healthy banksshould focus on transparency in their financial statements to keep their stockprice at the right value, which may also give large added value.
The State Bank of Vietnam (SBV) governor LeMinh Hung said to help investors better understand the condition of banks, SBVwill ask financial organisations in near future to make their periodicallyaudited financial statements public and list them on the stock market.-VNA
VNA
