Vietcombank will sell 5 million shares it holds in Eximbank,representing a 1.26-percent stake, as part of its effort to restructureits investment portfolio and meet stricter capital adequacy ratio (CAR)requirements, Vietcombank management board member Le Thi Hoa toldVietnam News on August 11.
Hoa is also deputy CEO of Eximbank.
The deal willlower Vietcombank's share ownership in the HCM City-based bank (codedEIB on the HCM Stock Exchange) to 6.93 percent, Hoa said.
The sale will be executed via order-matching or negotiation betweenFriday of this week and October 10, confirmed the HCM Stock Exchange.
The divestiture follows Vietcombank's sale of 5 million EIB shares last month.
"Don't be too serious about these deals," Hoa said. "Buying or sellingshares is normal. Eximbank shares have a high potential and highliquidity, and our investment principle is not to put all of our eggs inone basket."
Vietcombank, as a State-owned bank,was originally instructed to invest in Eximbank to assist the strugglingbank to avoid insovlency back in 2000, when Eximbank's bad debt wastwo- or three-times its charter capital. At that time, the Governmentdirected Vietcombank to buy a 20-per-cent stake in Eximbank at a cost of50 billion VND (2.63 million USD).
"Vietcombankintended to sell its EIB shares in 2006-07 when Eximbank began to turn aprofit, but Eximbank's executive board asked us to stay longer," Hoasaid.
Excluding State-owned banks, now Eximbankleads all commercial banks in capital, with a charter capital of 13trillion VND (684 million USD). The bank also has a foreign strategicinvestor, Japan's Sumimoto Mitsui Banking Corporation.
"Our mission is over," Hoa said. "Now we have to manage to raise our own CAR from 8 to 9 percent and increase our equity."
Vietcombank continues to hold stakes in Military Bank, Orient Bank,and Gia Dinh Bank. It earlier sold 19 percent of its stake in Gia DinhBank, cutting its share of ownership to 11 percent.
Vietcombank currently has charter capital of 13.2 trillion VND (688.7million USD), and it posted a first-half profit of 2.8 trillion VND(145.8 million USD), up 7.3 percent against the same six months of lastyear. Net income from non-credit services was up 15 percent to a totalof 475 billion VND (24.7 million USD).
TheHanoi-based bank has increased its risk provision to 39.6 percentagainst the first half of last year to 350 billion VND (18.2 millionUSD) and had total assets as of June 30 worth 246.3 trillion VND (12.8billion USD).
Vietcombank chairman Nguyen Hoa Binhtold Vietnam News that he was very pleased and believed that Vietcombankwould be able to beat its target of 4.5 trillion VND (234.4 millionUSD) in profits by year's end.
Vietcombank shares,coded VCB on the HCM Stock Exchange, closed up 0.29 percent on August 11to 34,800 VND per share, while EIB shares closed down 1.71 percent to17,200 VND./.
Hoa is also deputy CEO of Eximbank.
The deal willlower Vietcombank's share ownership in the HCM City-based bank (codedEIB on the HCM Stock Exchange) to 6.93 percent, Hoa said.
The sale will be executed via order-matching or negotiation betweenFriday of this week and October 10, confirmed the HCM Stock Exchange.
The divestiture follows Vietcombank's sale of 5 million EIB shares last month.
"Don't be too serious about these deals," Hoa said. "Buying or sellingshares is normal. Eximbank shares have a high potential and highliquidity, and our investment principle is not to put all of our eggs inone basket."
Vietcombank, as a State-owned bank,was originally instructed to invest in Eximbank to assist the strugglingbank to avoid insovlency back in 2000, when Eximbank's bad debt wastwo- or three-times its charter capital. At that time, the Governmentdirected Vietcombank to buy a 20-per-cent stake in Eximbank at a cost of50 billion VND (2.63 million USD).
"Vietcombankintended to sell its EIB shares in 2006-07 when Eximbank began to turn aprofit, but Eximbank's executive board asked us to stay longer," Hoasaid.
Excluding State-owned banks, now Eximbankleads all commercial banks in capital, with a charter capital of 13trillion VND (684 million USD). The bank also has a foreign strategicinvestor, Japan's Sumimoto Mitsui Banking Corporation.
"Our mission is over," Hoa said. "Now we have to manage to raise our own CAR from 8 to 9 percent and increase our equity."
Vietcombank continues to hold stakes in Military Bank, Orient Bank,and Gia Dinh Bank. It earlier sold 19 percent of its stake in Gia DinhBank, cutting its share of ownership to 11 percent.
Vietcombank currently has charter capital of 13.2 trillion VND (688.7million USD), and it posted a first-half profit of 2.8 trillion VND(145.8 million USD), up 7.3 percent against the same six months of lastyear. Net income from non-credit services was up 15 percent to a totalof 475 billion VND (24.7 million USD).
TheHanoi-based bank has increased its risk provision to 39.6 percentagainst the first half of last year to 350 billion VND (18.2 millionUSD) and had total assets as of June 30 worth 246.3 trillion VND (12.8billion USD).
Vietcombank chairman Nguyen Hoa Binhtold Vietnam News that he was very pleased and believed that Vietcombankwould be able to beat its target of 4.5 trillion VND (234.4 millionUSD) in profits by year's end.
Vietcombank shares,coded VCB on the HCM Stock Exchange, closed up 0.29 percent on August 11to 34,800 VND per share, while EIB shares closed down 1.71 percent to17,200 VND./.
