The Bank for Industry and Trade of Vietnam (Vietinbank) plans to sell 20 percent of its shares to a strategic partner in the third or fourth quarter of this year, said Pham Huy Hung, the bank's chairman, at an analysts' meeting on May 16 in Hanoi.

Hung said: "The bank's shares are now below their real value and priced reasonably at between 30,000 VND to 40,000 VND (1.4-1.9 USD) each."

The chairman said that by late April, the bank's profits stood at 2 trillion VND (95.2 million USD) and its capital adequacy ratio (CAR) was 11 percent. The bad debt ratio meanwhile stood at 2 percent, which Hung said Vietinbank (CTG) was hoping to reduce to 1 percent by the end of the year.

Vietinbank successfully raised 250 million USD from an international five-year bond sale with a yield of 8 percent – a high rate, Hung said.

However, he said investors are still concerned about the economic climate, and the country's credit rating is low. The successful international bond issue was a good sign. Meanwhile, he said a number of solid financial institutions has been forced to raise annual interest rates to between 9-10 percent.

Although interest rates in US dollars for short-term deposits stand at 2 percent, it was difficult to mobilise funds for medium- and long-term deposits. That is why Vietinbank decided to issue international bonds to help stabilise domestic foreign currency levels, he added.

The bonds were issued in Europe, Asia and the US , following Government approval in February.

Regarding non-productive loans, the Vietinbank chairman said lending levels in the real estate sector stands at 3.6 percent, while securities investment rates stands at 0.13 percent.

When asked about the bank's mergers and acquisitions, Hung said the bank would consider the move, which is in line with a State Bank of Vietnam directive. However, he said the bank has to ensure shares are appropriatly valued before making a specific decision.

The selling and buying of shares is part of the State's roadmap to divest capital in the bank. State capital will be reduced from 60 percent to 51 percent, as instructed by the Prime Minister, the chairman said.

By the first quarter of this year, the bank's total assets stood at 406 trillion VND (19.3 billion USD), a year-on-year rise of 28 percent. Meanwhile, its after-tax profits reached 1.3 trillion VND , 60 percent up on the same period last year.-VNA