Gov’t okays Bao Viet’s bank project

One more economic group, Bao Viet insurance, is moving ahead with its plan to set up a new bank, called Bao Viet Commercial Joint Stock Bank.
On July 23, the Government’s Office released the notice, announcing the Prime Minister’s opinion on agreeing to Bao Viet’s proposal on setting up a Bao Viet Bank, which belongs to Bao Viet Group.

The Prime Minister has assigned the Governor of the State Bank of Vietnam to consider and decide the capital contribution by Bao Viet Group into Bao Viet Bank.

In fact, Bao Viet Group mentioned the intention to establish a bank in early 2006, considering this a very important step in the development strategy of Bao Viet as the bank will support financial activities of Bao Viet.

Bao Viet initially wants to hold more than 50% of the bank’s capital. However, according to a new regulation on bank establishment and operation, every shareholder institution can hold 20% of the total capital. Experts said that the new regulation will force Bao Viet to change its initial plan.

Prior to that, the Government agreed to the proposal by the Vietnam Post and Telecommunication Group (VNPT) to establish a joint stock bank. VNPT has been assigned to draw up the project on setting up such a bank based on the existing Postal Savings Services Company. The project will be submitted to the Prime Minister for consideration and approval.

At the same time, a group of three giants in their fields, including FPT (the Corporation for Financing and Promoting Technologies), MobiFone, a telecommunication service provider, and the State Capital Investment Corporation (SCIC), the powerful corporation specializing in investing state owned capital in businesses, have decided to join forces to set up a bank, FPT Bank.

According to Hoang Minh Chau, Deputy Chairman of FPT, said that the bank would have the initial chartered capital of VND1tril ($62.5mil). Each of the three founding shareholders will contribute 15% of capital each, while the remaining capital will be sourced from individual investors.

Also on July 23, the Prime Minister requested the State Bank of Vietnam to consult with relevant ministries, institutions and individuals on the draft decree on organization, governance and operation of commercial banks. The consultation will be carried out via the government’s website before the final draft is submitted to the Government for consideration and approval.

In related news, the second auction of Bao Viet’s shares on July 23, which aimed to sell the 15mil shares left unsold from the first auction, was, once again, not as successful as expected. The total volume of shares investors registered to buy was very low, less than 2mil shares.

Only 1,917,500 shares have been sold, or 12.24% of the total shares put on sale in the second auction (15,656,286 shares).

Foreign investors could buy nearly all the offered shares, and at the average price of VND1,870,000/share.

Source: VNE