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Equities

Vietnam's HDBank becomes latest lender to go public

Among 20 largest companies on Ho Chi Minh bourse as bank reforms squeak ahead

HDBank's debut marks the first listing of a Vietnamese bank this year.

HO CHI MINH CITY -- HDBank listed more than 980 million shares on the Ho Chi Minh City Stock Exchange on Friday, with a reference price of 33,000 dong apiece, giving the lender a valuation of around 32.4 trillion dong ($1.43 billion).

This marks Vietnam's first listing of a bank this year. The country's banking sector, which includes state-owned entities, is being pushed to reform and modernize. It has seen progress after some delays.

HDBank is among 10 banks that should have been listed by the end of 2017. Only five met the deadline.

Lenders achieved double-digit profit increases in 2017 with strong credit growth of about 19%, Vietnam's National Financial Supervisory Commission said. Nonperforming loans were kept within 3% of total lending. Returns on assets and on equity among banks reached the highest levels in five years, according to the commission.

Analysts attribute improvements last year to better performances by private lenders such as HDBank.

HDBank is one of the 20 largest companies listed on the Ho Chi Minh City Stock Exchange.

In the morning session, more than 19 million HDBank shares changed hands, peaking at 38,900 dong apiece, 18% above the offer price. Its market capitalization ranks among the top 20 listed companies on the exchange, which is home to more than 400 companies.

HDBank was established in 1990, and since 2008 has been more than 10% owned by Nguyen Thi Phuong Thao and her company. Thao is the founder and chief executive of Vietjet Air, the biggest  budget airline in Vietnam. Thao also serves as the bank's vice chair.

HDBank reported a net profit of 1.93 trillion dong for 2017, up 112% year on year, and plans to increase that 61% to 3.1 trillion dong in 2018.

Mounting bad debt had been weighing on Vietnam's banks since 2012, necessitating structural change including the introduction of a body to buy bad debt, nationalization of weak institutions, and long-term consolidation of the sector. The State Bank of Vietnam, the country's central bank, set a deadline for banks to list, but bad loans and corruption scandals involving executives have stalled the process.

Banks that failed to debut by the end of 2017 include Techcombank, TPBank, Orient Commercial Bank, Nam A Bank, Maritime Bank, VietABank, and SeABank. The new deadline is Dec. 31, 2018.

(Nikkei)

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