Vietnamese state-run Bank for Investment and Development (BIDV) Tuesday traded more than VND2 trillion (US$125 million) in bonds on the Ho Chi Minh City Securities Center.
The BIDV bonds’ face value is VND100,000 each.
The three-year BID10106 bonds carry annual coupon of 9.36%, the five-year BID10206 bonds come at 9.5% interest, while 10.1% and 10.45% interest rates are tacked onto the 15-year BID10306 bonds, and the 20-year BID10406 bonds respectively.
BIDV was the first bank to list bonds on the stock exchange in November 2000. The lender has traded more than VND4 trillion worth of bonds with face values of VND100,000 each.
BIDV CEO Tran Bac Ha said the bank is expected to issue US$1 billion worth of bonds this year with the first VND5 trillion to be issued in Vietnam dong.
The bank would pick up an international financial consulting institution for the issue.
The bank has put its equitization plan on the fast track to launch an initial public offering (IPO) in the fourth quarter this year.
The country’s second-largest bank is entering the process to pick up an international consultant among five potential consultants including Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley and UBS for its IPO.
BIDV also expected to select two multinational financial institutions as strategic investors prior to mounting its IPO in the fourth quarter.
Tran Bac Ha said the bank would hire the Ministry of Finance’s auditing firm to calculate the
bank’s tangible assets while the bank would hire an international auditor for intangible assets.
After the state injected VND3.4 trillion (US$212 million) into the bank in February, the bank now has a total chartered capital of VND7.5 trillion ($470 million) and its equities have amounted to nearly VND10.2 trillion.
Under 2006 auditing reports by Ernst & Young based on International Financial Ratio Standards, the bank’s total assets as of late last year were VND161.3 trillion (tangible) and VND158.22 trillion (intangible), up 33% and 34% over the previous year.
Its after tax-profits last year were VND1.1 trillion ($68.6 million) under the Vietnam Accounting System and VND613 billion ($38.2 million) under the International Financial Reporting Standards.
The bank’s bad debt ratio has been drastically reduced to 6.44% and this ratio would fall further to less than 5% in the third quarter of this year, according to Ha.
Revenue from investment banking including securities and money dealing has increased substantially, while revenue from interest sums has been reduced to 63.6% last year from 77% the previous year.
Moody's Investors Service has raised the credit capacity outlook of BIDV from ‘E’ to ‘E+’. Last year, Moody ranked the bank's creditworthiness as Ba1 for an issuer of Vietnamese dong with a stable outlook.
Source: Thanh Nien
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