Agribank's IPO in August 2008

The Bank for Agriculture and Rural Development (Agribank), Vietnam's largest lender by assets, plans to offer shares to the public for the first time in August 2008, a bank executive was quoted on Thursday as saying.

"By March 2008 the privatisation of all subsidiaries will be mostly completed and Agribank will conduct the initial public offering in August 2008," the central bank-run Banking Times newspaper quoted acting chief executive Nguyen The Binh as saying.

Agribank's share issue, following IPOs by four state-run banks scheduled for late this year, is seen as a test of market-opening commitments Vietnam made before joining the World Trade Organisation in January.

Agribank had assets of 280 trillion dong ($178.4 billion) on March 31, up 19.7% from the end of 2006 and making it the largest of Vietnam's more than 40 banks.

As well as preparing for a partial privatisation, Agribank also planned to diversify to turn itself into a group comprising a bank and at least 11 shareholding companies, Binh said.

The companies would provide services ranging from insurance to stockbroking to financial leasing to gold trading and real estate, he said in the interview with the newspaper.
Binh did not say when the bank planned to list its shares.

Agribank had a capital adequacy ratio lower than the international standard, weak corporate governance and limited profitability as it served agriculture, an area exposed to natural calamities, diseases and market risks, Binh said.

But Agribank has a network of more than 2,000 branches and points of service.
"With a large network covering all urban and rural areas where other banks would be difficult to reach or they need to spend much time and finance, Agribank has conditions to meet customer's diverse demands in any area at a low cost," Binh said.

The bank has not published any details of its IPO, but foreign investors can own a maximum 30% of a Vietnamese bank.

The government also caps the stake of a strategic, non-bank investor at 15%. A foreign bank can own 10% and a non-bank investor that is not a strategic investor can own only 5%.

Source: Reuters