Vietcombank will sell 5 million shares it holds in Eximbank, representing a 1.26-percent stake, as part of its effort to restructure its investment portfolio and meet stricter capital adequacy ratio (CAR) requirements, Vietcombank management board member Le Thi Hoa told Vietnam News on August 11.

Hoa is also deputy CEO of Eximbank.

The deal will lower Vietcombank's share ownership in the HCM City-based bank (coded EIB on the HCM Stock Exchange) to 6.93 percent, Hoa said.

The sale will be executed via order-matching or negotiation between Friday 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 selling shares is normal. Eximbank shares have a high potential and high liquidity, and our investment principle is not to put all of our eggs in one basket."

Vietcombank, as a State-owned bank, was originally instructed to invest in Eximbank to assist the struggling bank to avoid insovlency back in 2000, when Eximbank's bad debt was two- or three-times its charter capital. At that time, the Government directed Vietcombank to buy a 20-per-cent stake in Eximbank at a cost of 50 billion VND (2.63 million USD).

"Vietcombank intended to sell its EIB shares in 2006-07 when Eximbank began to turn a profit, but Eximbank's executive board asked us to stay longer," Hoa said.

Excluding State-owned banks, now Eximbank leads all commercial banks in capital, with a charter capital of 13 trillion VND (684 million USD). The bank also has a foreign strategic investor, 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 Dinh Bank, cutting its share of ownership to 11 percent.

Vietcombank currently has charter capital of 13.2 trillion VND (688.7 million 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 last year. Net income from non-credit services was up 15 percent to a total of 475 billion VND (24.7 million USD).

The Hanoi-based bank has increased its risk provision to 39.6 percent against the first half of last year to 350 billion VND (18.2 million USD) and had total assets as of June 30 worth 246.3 trillion VND (12.8 billion USD).

Vietcombank chairman Nguyen Hoa Binh told Vietnam News that he was very pleased and believed that Vietcombank would be able to beat its target of 4.5 trillion VND (234.4 million USD) in profits by year's end.

Vietcombank shares, coded VCB on the HCM Stock Exchange, closed up 0.29 percent on August 11 to 34,800 VND per share, while EIB shares closed down 1.71 percent to 17,200 VND./.