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Banking & Finance

HDBank to list shares on January 5

Released at: 12:28, 29/12/2017

HDBank to list shares on January 5

Photo from news.zing.vn

980 million shares up for grabs on HoSE at a reference price of $1.46 per share.

by Duy Anh

The Ho Chi Minh City Development Bank (HDBank) will debut on Vietnam’s main stock exchange on January 5, according to a listing document released on December 28, after it raised $300 million at an initial public offering (IPO) last week.

The bank has been granted approval to list over 980 million shares on the Ho Chi Minh Stock Exchange (HoSE) at a reference price of VND33,000 ($1.46) per share, suggesting a market value of VND32.4 trillion ($1.43 billion) post-listing, making it the seventh-largest Vietnamese bank by market cap.

Ms. Nguyen Thi Phuong Thao, billionaire Founder and Chairwoman of Vietnam’s largest private airline Vietjet Aviation, is Vice Chairman of HDBank. The exchange allows share prices to fluctuate within a band of 20 per cent on the first trading day. In Vietnam, IPOs and listings are two separate processes.

The IPO last week, which generated $150 million of new equity for the bank, is credit positive for a bank dealing with risks to asset quality amid rapid credit growth and profitability being constrained by high credit costs.

More than 76 foreign investors paid a total $300 million for shares of HDBank in the IPO on December 22. Japan’s Credit Saison, Germany’s Deutsche Bank, and JPMorgan Vietnam Opportunities Fund, among others, bought shares at the IPO, the bank said, with each picking up less than 3 per cent.

With a total asset size of VND175 trillion ($7.7 billion) as at end-September and a market share of around 1.8 per cent of system assets, the mid-tier bank currently enjoys a return-on-assets ratio of 1.18 per cent and return-on-equity of 18 per cent.

As total deposits grew 14 per cent in the first nine months of 2017 through a broader range of deposit products and expansion of its branch network, the bank made VND1.91 trillion ($84 million) in consolidated pre-tax profit during the first nine months, a three-fold year-on-year increase, of which VND1.7 trillion ($74.8 million) came from the parent bank alone. The result of the parent bank, which is 1.5 times higher than the full year of 2016, marked its highest achievement so far.

The bank has been focusing on individuals and small and medium-sized enterprises (SMEs) to help grow its profits by an average of 35 per cent a year in the past five years, while profits are expected to grow about 25 per cent annually in the coming year. HDBank expects to report a pre-tax profit this year of VND2.4 trillion ($105.66 million).

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