Domestic Banks Selling Control to Local Investors

Habubank attracts local investors (Photo: Hoang Uy)

Local joint-stock commercial banks have long looked overseas for investment to increase their capital. Selling stocks to foreign investors not only met their demand for capital, but also raised the price of their stocks listed on the Over the Counter (OTC) market.

However, local banks are also increasingly looking at domestic investors. They believe that with sound business plans and good technical and management support, they will be able to may make significant gains.

With the support of foreign capital, the value of many local bank shares including the Oriental Commercial Joint-Stock Bank (OCB), the Southern Bank, Habubank and the East Asia Bank, listed on the OTC market, have increased.

However, local banks are also increasingly looking at domestic investors. They believe that with sound business plans and good technical and management support, they will be able to may make significant gains.

For example, OCB has sold 31,500 shares for the Sai Gon Beer and Alcoholic Beverage Corporation (SABECO), equal to 5% of its total chartered capital. This will bring SABECO another financial channel while helping OCB create more banking products and expand its network.

Similarly, Eximbank and giant food producer Kinh Do have teamed up with each other. Kinh Do has bought 6.28% of the bank’s net worth at US$90 million. As a strong corporation whose brand is widely popular both locally and internationally, Kinh Do will require extensive investment from local banks. On the other hand, Eximbank will have lots of opportunity to make investments in Kinh Do’s lucrative business projects.

Aside from one million shares sold to Vietcombank Securities, the Southern Bank has sold another one million shares worth US$5 million to the Saigon Trading Group (SATRA). According to their agreement, Southern Bank will offer banking services to SATRA’s subsidiary companies and financial support for SATRA’s larger projects.  

By Thao Nguyen - Translated by Hoang Uy

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