Commercial banks raise chartered capital in a hurry (11/6)
11/06/2012 - 15 Lượt xem
The merger and acquisition (M&A) in the banking sector is believed to be very
bustling in the time to come, especially when the government has kicked off the
banking restructure process.
A lot of banks have become the aiming points of bigger banks which attempt to become more powerful by taking over other banks. In such circumstances, the only solution to small and less competitive banks to protect themselves is step by step consolidating their inner strength by increasing their chartered capital.
On May 29, the shareholders’ meeting of Viet A Bank approved the plan to issue shares to increase its chartered capital to 5 trillion dong. If the plan succeeds, the bank’s capital would increase significantly by 61 percent.
However, the information that SJC, a big shareholder of Viet A Bank, plans to withdraw capital from the bank, has worried shareholders. Viet A Bank’s President Phuong Huu Viet said he has received a document informing about the capital withdrawal, but this has not been implemented yet.
In order to strengthen their internal force and avoid M&A, Nam A Bank plans to raise its chartered capital from 3 trillion dong to 3.7 trillion dong. The chartered capital of Saigon Bank would also be raised to 3.5 trillion dong in 2012 from the current 3 trillion dong. Meanwhile, OCB is considering raising the chartered capital to 4 trillion dong by the end of 2012 from the current level of 3234 billion dong.
Trinh Van Tuan, President of OCB Bank emphasized at the shareholders’ meeting--the need of increasing capital, saying that the move would ensure the financial capability and allow to meet the standards set up by the State Bank of Vietnam in its plan to restructure the banking system.
However, analysts have warned that the plans of many banks can exist only on paper. As the stock market keeps gloomy, investors keep away from securities, issuing shares proves to be an impossible mission.
The analysts have said that banks would find it difficult to attract existing shareholders as well, even though banks offer a lot of preferences selling shares at the face value of 10,000 dong per share.
Though banking is still considered the most lucrative business field in the national economy, investors would hesitate to inject money in banks, especially small and medium banks.
Meanwhile, as a lot of banks plan to issue shares, it is expected that the volume of bank shares to be available on the market would be very big. If so, the oversupply may lead to the dramatic falls of the share prices.
Not only small banks, but the big ones have also submitted to the shareholders’ meeting the plan to increase chartered capital.
Dong A bank, for example, which has completed the plan to increase capital from 4.5 trillion dong to 5 trillion dong, is considering issuing more shares to existing shareholders to raise the chartered capital to 6 trillion dong by the fourth quarter of 2012. HD Bank is awaiting the approval by the State Bank on its plan to increase capital to 5.4 trillion dong.
Dr Le Xuan Nghia, a well-known economist, has also warned that it would be not an easy task for banks to increase capital. “As for small and weak banks, merging into other more powerful banks proves to be the best solution,” he said.
A dollar is equal to 21,000 Vietnam dong.
Source: TBKTVN
A lot of banks have become the aiming points of bigger banks which attempt to become more powerful by taking over other banks. In such circumstances, the only solution to small and less competitive banks to protect themselves is step by step consolidating their inner strength by increasing their chartered capital.
On May 29, the shareholders’ meeting of Viet A Bank approved the plan to issue shares to increase its chartered capital to 5 trillion dong. If the plan succeeds, the bank’s capital would increase significantly by 61 percent.
However, the information that SJC, a big shareholder of Viet A Bank, plans to withdraw capital from the bank, has worried shareholders. Viet A Bank’s President Phuong Huu Viet said he has received a document informing about the capital withdrawal, but this has not been implemented yet.
In order to strengthen their internal force and avoid M&A, Nam A Bank plans to raise its chartered capital from 3 trillion dong to 3.7 trillion dong. The chartered capital of Saigon Bank would also be raised to 3.5 trillion dong in 2012 from the current 3 trillion dong. Meanwhile, OCB is considering raising the chartered capital to 4 trillion dong by the end of 2012 from the current level of 3234 billion dong.
Trinh Van Tuan, President of OCB Bank emphasized at the shareholders’ meeting--the need of increasing capital, saying that the move would ensure the financial capability and allow to meet the standards set up by the State Bank of Vietnam in its plan to restructure the banking system.
However, analysts have warned that the plans of many banks can exist only on paper. As the stock market keeps gloomy, investors keep away from securities, issuing shares proves to be an impossible mission.
The analysts have said that banks would find it difficult to attract existing shareholders as well, even though banks offer a lot of preferences selling shares at the face value of 10,000 dong per share.
Though banking is still considered the most lucrative business field in the national economy, investors would hesitate to inject money in banks, especially small and medium banks.
Meanwhile, as a lot of banks plan to issue shares, it is expected that the volume of bank shares to be available on the market would be very big. If so, the oversupply may lead to the dramatic falls of the share prices.
Not only small banks, but the big ones have also submitted to the shareholders’ meeting the plan to increase chartered capital.
Dong A bank, for example, which has completed the plan to increase capital from 4.5 trillion dong to 5 trillion dong, is considering issuing more shares to existing shareholders to raise the chartered capital to 6 trillion dong by the fourth quarter of 2012. HD Bank is awaiting the approval by the State Bank on its plan to increase capital to 5.4 trillion dong.
Dr Le Xuan Nghia, a well-known economist, has also warned that it would be not an easy task for banks to increase capital. “As for small and weak banks, merging into other more powerful banks proves to be the best solution,” he said.
A dollar is equal to 21,000 Vietnam dong.
Source: TBKTVN
