Incombank issues CDs to raise $200 mln

State-run Vietnam Industrial and Commercial Bank (Incombank), the country's fourth-largest lender by assets, said on Monday it would raise $200 million through issuing dollar-denominated certificates of deposit (CD).

The Hanoi-based unlisted Incombank said it began issuing the CDs to Vietnamese investors and foreign investors residing in the country over a two-month period last week.

The bank did not say what it would use the proceeds for.

It offered to pay 5.3 percent interest on 12-month dollar-denominated certificates, 5.4 percent for 18-month deposits and 5.5 percent for the 24-month CDs, following approval from the central bank.

Incombank's assets at the end of June rose 12 percent from the end of 2006 to 155 trillion dong ($9.6 billion).

The central bank had said it would take more dong out of the economy in the coming months through open market transactions to curb inflation, which accelerated in July to 8.39 percent from a year earlier.

Source: Reuters

Vietnam's Incombank to sell shares to foreign banks

U.S.-based Citibank, Asia Development Bank and Deutsche Bank are vying to buy shares in Incombank, Vietnam's fourth-largest by assets, before its local IPO in October and abroad early next year.

Incombank Chief Executive Pham Huy Hung said the three were among 10 firms which had applied to become strategic investors, the Vietnam News newspaper said on Friday. The bank will pick two from 30 shortlisted candidates before its October IPO.

Hanoi-based Incombank, the shortname for Vietnam Industrial and Commercial Bank and which has total assets of around $9 billion, is also looking at an IPO in London or New York in early 2008, he said.

"Foreign strategic investors must be committed to Incombank for at least five to 10 years," Hung was quoted as saying after signing a contract on Thursday to hire JPMorgan to advise on Incombank's IPOs and suggest the shortlist.

A foreign bank can own up to 20 percent in a Vietnamese bank if it is chosen to become a strategic investor. Overall, Vietnam caps foreign ownership in a domestic bank at 30 percent.

The state will retain a 51 percent stake in Incombank and the bank plans to sell another 49 percent of its 900 million shares to investors and staff.

Incombank and four other state-run banks have been ordered to conduct partial privatisation this year and in 2008.

Deutsche Bank is advising state-run Mekong Delta Housing Bank on the process with an IPO scheduled for next month.


Source: Reuters

Banks and a finance group lend $156 mln for hydroelectricity plant

All four state-owned banking giants in Vietnam and a financial institution have joined hands to provide VND2.5 trillion (US$156 million) for building a hydropower plant in the northern Son La province.

Following credit deals signed Tuesday, the Industrial and Commercial Bank of Vietnam, the Bank for Investment and Development of Vietnam, Asia Commercial Bank, Military Bank and PetroVietnam Finance Co will provide VND1.92 trillion in long-term loans.

The rest will be provided as working capital by the Bank for Foreign Trade of Vietnam.

The Nam Chien Hydroelectricity Plant will be built at a cost of VND4.17 trillion Nam Chien company in Muong La district.

The 200MW plant will be ready by 2009 or 2010 at the latest.

Power demand is increasing by 20 percent a year while the state-run Electricity of Vietnam has said generation will grow by less than 15 percent.

In recent years the government has adopted priority policies to attract investors in the power sector.

The Ministry of Planning and Investment said several mammoth electricity projects involving investments of billions of dollars by foreign companies were awaiting approval.

In the north, the US’s AES and Vietnam Coal and Mineral Industries Group plan to build the 1,200 MW Mong Duong 2 thermal power plant at a cost of $1.4 billion in Quang Ninh province.

While Japan’s Sumitomo Corp., which has more than 25 projects in Vietnam, is planning to build a 2,640 MW, $4 billion power plant in Khanh Hoa province, in central Vietnam.

In the south, the US’s Cannon Group is seeking to build a 1,000 MW power plant in Dong Nai province, while Singapore’s leading power and integrated utilities firm, SembCorp Utilities Pte. Ltd., looks set to invest $500 million to build a 700 MW plant in Ho Chi Minh City.

Power demand in Vietnam's economy, the world's fastest growing after China, is forecast to grow up to 17 percent per year, driving the government to plan the construction of 60 additional plants by 2020.

Source: Thanh Nien

Government asks for reconsideration of equitisation plan

The Prime Minister has asked the Ministry of Finance, State Bank of Vietnam and other relevant ministries to reconsider the plan on state-owned enterprise equitisation for 2007.

The Prime Minister asked for this work to be done right in the second quarter of 2007. Special attention must be paid to big corporations, including state-owned banks, economic groups and general corporations, which have high equitisation value. This will help ensure the success of the equitisation of enterprises while positively impacting the capital market and the national economy.

Also connected to this issue, several days ago, at a meeting on investment in the first six months of the year, the Bank for Development and Investment (BIDV) officially proposed a rearrangement of the timing for the equtisations and IPOs of big corporations.

Tran Bac Ha, Director General of BIDV, said that the excess of IPOs would lead to the oversupply of commodities, harming the stock market and causing losses to the state.

Vietnam planned to equitise 26 general corporations in 2007; a series of IPOs to be made by big corporations, including Vietcombank (the Bank for Foreign Trade of Vietnam), Vietincombank (Vietnam Industrial and Commercial Bank), and BIDV were scheduled to have been made.

In the newly released instruction on implementing state-sourced capital investment, the Prime Minister has also asked ministries, economic groups and general corporations to carry out measures to push up the disbursement rate of construction projects.

The Prime Minister has asked ministries to check legal regulations relating to the implementation of projects. Ministries have been instructed to amend the regulations if necessary, and promulgate documents timely, which will help remove obstacles for investors.

According to the Ministry of Planning and Investment, the pace of the disbursement of state-sourced investment and development capital has been very slow, just fulfilling 42.6% of the yearly plan, while the disbursement of capital for key construction works has just fulfilled 30% of the plan.

The State Bank of Vietnam, the Vietnam National Administration of Tourism and Electricity of Vietnam, Vinh Long and Hau Giang provinces, had very low disbursement rates, less than 10%, while 36 ministries, branches and localities had disbursement rates of between 10-30% of the yearly plan.

Source: VNE

Incombank signs PetroVietnam deal

Industrial Commercial Bank of Viet Nam (Incombank) will act as PetroVietnam’s primary provider of financial services under an agreement signed on June 21 Ha Noi.

PetroVietnam will also offer Incombank opportunities to directly invest in domestic and overseas projects, said Tran Ngoc Canh, general director of the State-owned oil company.

”I do believe that this cooperation will bring more opportunities for both of us in terms of supporting investment capital, expanding operational networks, diversifying business sectors, and exploiting each other’s advantages,” said Incombank general director Pham Huy Hung at the signing ceremony on June 21.

Under the agreement, Incombank would commit loans at favourable interest rates as well as provide other financial services to PetroVietnam and its subsidiaries.

Since the beginning of the year, Incombank has signed similar agreements with local giants like the Viet Nam National Cement Corporation (VNCC), the Viet Nam National Coal and Mineral Industry Group (Vinacomin), and the Viet Nam Post and Telecommunications Group (VNPT).
Hung also said Incombank has speeded up negotiations with leading local companies to become strategic partners as it expands.

Source: VNA

Bank equitization faces delay

Four major State-run commercial banks are seen going public later than scheduled, said Le Xuan Nghia, director of the State Bank of Vietnam's Development Strategy Department.
He told 70 EuroCham members and other participants at the Banking Equitization: Going Global" luncheon in HCMC on Tuesday that the initial public offerings (IPO) by these banks would be a little later than expected due to problems with finding strategic shareholders and sharing price.

The Bank for Foreign Trade of Vietnam (Vietcombank), the Bank for Investment and Development of Vietnam, the Industrial and Commercial Bank (Incombank) and the Mekong Delta Housing Development Bank earlier planned to launch IPOs by this October.

Tumbling blocks have also arisen as to selling shares to staff of these banks.

Nghia explained strategic investors considered the offered share prices too high. The Government has ruled prices for strategic investors are based on the average price at IPOs.
This rule might undergo change, Nghia said at the luncheon organized by the European Chamber of Commerce in Vietnam (EuroCham). Therefore, there will be share auctions for only strategic investors before the IPOs.

However, he pointed out selling shares to staff of the four banks as a complicated issue that remains to be solved. He said there had been heated discussions about the staff's interests regarding to the number of their working years and shares for them as well as the interests of staff at the parent companies and subsidiaries.
He acknowledged that all the "humanitarian" issues were a hard nut to crack.

The Government permits the price of shares for staff to be 60% of the price set at public auctions.

There is a plan to equitize the Bank for Agriculture and Rural Development from 2008 and this job should be done by 2009, he said.

Nghia said the Government wanted to improve corporate governance for the banking sector through the equitization of the State-run banks.

Nghia stressed that Vietnam was implementing its commitments to the World Trade Organization and that the bilateral trade agreement with the US, under which the financial market will be opened up to foreign investors.

The Government allows foreign banks with total assets of at least US$20bil to open branches in Vietnam, and those with US$10bil or more to establish 100% foreign-owned banks and joint ventures with local banks.

Nghia said there were now six applications for opening, 100% foreign-owned banks but around 33 applications for new local banks.

Source: VNE

What lies behind enterprise-bank cooperations?

The quickest way for enterprises to enter the financial market is to join hands with banks, while banks find it easiest to attract more clients if they cooperate with enterprises.

Big corporations and bankers nowadays tend to ‘shake hands’ in multifaceted cooperation agreements. Joint stock banks aim to attract more clients when they choose strategic shareholders. Experts have said that this is the quickest way to grab the market share that they had not got before.

Eximbank’s Director General Pham Van Thiet said that bankers and big corporations cooperated with each other in order to take full advantage of the client networks and services of the partners.

For example, Eximbank has signed an agreement with Kinh Do Group, under which, the bank can use the network of the group to offer more services to more clients. A large number of Kinh Do’s clients will use Eximbank’s services.

With the same goal, Eximbank has at the same time signed cooperation agreements with 16 local partners which operate in different fields. The total share value the bank has sold to its strategic shareholders has reached VND500bil ($31.25mil).

As for enterprises, which once found it very hard to access bank loans, they can more easily get loans after joining hands with banks.

Nevertheless, it is quite difficult to find suitable partners. A banker said that it took him many years to find a partner who could meet the requirements on capital, business vision, business network, and most importantly, had suitable development plans.

Under the new agreement signed between the Vietnam Post and Telecommunication Group (VNPT) and the Vietnam Industrial and Commercial Bank (Incombank), the two sides will move ahead with cooperation activities, make capital contributions and support each other in expanding and developing many business fields.

Similarly, 16 partners of Eximbank have promised to use each others’ services and make investment cooperation deals. Moreover, experts have said, enterprises all aim to hold bank shares to enter the financial market, which is very hot nowadays. Bach Viet and PC2, for example, have inked cooperation deals with An Binh Bank.

The financial market is so hot that 20 more applications to set up banks have been submitted to the State Bank of Vietnam, while foreign investors are also seeking to make investment in Vietnamese banks.

Source: VNE

JP Morgan to advise Vietnam's Incombank IPO

State-run Industrial and Commercial Bank (Incombank), Vietnam's fourth-largest, has picked JP Morgan to advise on its partial privatisation and an IPO scheduled for October, an official said on Tuesday.

The official did not disclose the fee JP Morgan will receive from for consultation for the process, which includes evaluation of the bank and organising the initial public offering.

"We picked JP Morgan," the official said. He said the Hanoi-based bank would make an official announcement soon, but did not give a date.

The consultant would also help Incombank select a strategic partner, the bank has said. It did not make clear if the partner would be a Vietnamese or a foreign company.

Incombank, with assets of $9.2 billion, has said it will conduct the IPO in October 2007.

It is one of four state-run banks, including Vietcombank, Vietindebank and the Mekong Delta Housing Development Bank, ordered to issue shares this year.

JP Morgan was shortlisted to join the Incombank tender along with Daiwa Security SMBC, Lehman Brothers, Macquarie, Merrill Lynch, Morgan Stanley and UBS.

JP Morgan along with Merrill, Morgan Stanley and UBS also joined a tender by Vietindebank to pick its adviser by late this month for privatisation and IPO.

Vietindebank said Merrill had the highest score of 87.2 for technical proposals while JP Morgan had the lowest, at 73.9. Vietindebank plans an IPO in the fourth quarter.

Incombank has not said how much it aimed to raise in the IPO or disclosed whether it would list on the main Ho Chi Minh Stock Exchange or the over-the-counter Hanoi Securities Trading Center.

Partly-private Sacombank (STB) is the only bank listed on the Ho Chi Minh City market and Asia Commercial Bank (ACB) has listed shares on the Hanoi exchange.

On Monday, Incombank signed with Vietnam Posts and Telecommunications (VNPT) group, the country's largest telecoms firm, an agreement to boost their investment and business, using each other's services.

Incombank has arranged a syndicate loan worth 2.3 trillion dong ($143 million) which will enable the telecoms group to launch Vietnam's first telecoms satellite, Vinasat, in 2008.
The agreement also aimed "at a target that Incombank and VNPT will become each other's strategic partners during their operation and development," Incombank said.

Source: Reuters

State-owned banks' rating upgraded

Fitch Ratings has upgraded the ratings of Vietnam's four leading state-owned commercial banks.
The ratings agency cited reasons for the upgrade as “better underlying profitability due to higher margins resulting from a higher interest rate and a shift towards more private-sector lending,” the report said.

The ratings for Bank for Investment and Development of Vietnam (BIDV) , Industrial and Commercial Bank (Incombank) of Vietnam and Vietnam Bank for Agriculture and Rural Development (Agribank) have been raised to ‘D/E’ from ‘E’, while the rating for the Bank for Foreign Trade of Vietnam's (Vietcombank) has been raised to ‘D’ from ‘D/E’.

The support ratings of the “big four” banks, which together account for about 75% of system-wide assets in Vietnam, remain unchanged at ‘4’.
The agency said though the Vietnamese government is willing to support the banks, its ability to do so could be constrained due to its own limited financial capacity as per its sovereign rating of 'BB-'.

In the case of all the banks' ratings, further upside potential could be limited, and indeed downside pressure could arise, if there was any deterioration in Vietnam's economy, Fitch said.

Source: Thanh Nien

Incombankbank Vietnam Cement tie up

The state-run Incombank and Vietnam Cement Corporation sealed a strategic partnership Thursday for joint growth.

Incombank will become a major investor in VNCC and its affiliates’ projects through providing finance.

In turn, VNCC will use banking and financial products and services only from Industrial and Commercial Bank of Vietnam, as Incombank is formally known.

The deal will also enable joint venture activities by the two.

Incombank has already invested more than VND5 trillion (US$311.7 million) in major VNCC’s cement plants in Hai Phong, Binh Phuoc, But Son, Hoang Mai, Tam Diep, Hoang Thach, and Ha Tien.

The bank has arranged 90 percent of the cost of a new production line at the Bim Son Cement Plant in Thanh Hoa province.

The Hanoi-based bank, which has a registered capital of VND10 trillion (US$625 million) is expected to list its shares on the stock market this year.

It is in the process of finding a foreign consultant to manage its initial public offering (IPO), planned for October.

Source: Thanh Nien

Incombank wants to sell larger stake to outsiders

Vietnam state-run Incombank is seeking the government’sx approval for its plan to sell more than the allowable 30% of state holdings to outsiders as it goes public this year.
The commercial bank, known as Bank for Industry and Commerce, is one of the four state-run banks ordered by the government to undertake partial share sales in 2007.
It wants to sell 49% stakes to strategic partners, foreign financial institutions, private investors and senior staff.
However, the government allows it, as well as the three other banks, to sell a 30% to outsiders.
The state is supposed to retain control of the remaining 70% of the banks.
The Hanoi-based bank, which has registered capital of VND10 trillion (US$625 million) is also expected to list its shares on the country’s stock market later this year.
Incombank is now in the process of finding a foreign consultant to manage its initial public offering (IPO), planned for October.
The lender is expected to pick up an advisor by May.
A banking expert who chose to remain anonymous said seven international banks will take part in the tendering process - Lehman Brothers, Merrill Lynch, JP Morgan, UBS, Morgan Stanley, Macquarie, and Daiwa Securities.
The bank has been employing an international auditing company since earlier this year to prepare for the process.
With 137 branches and 500 transaction points nationwide, the bank reported its total assets rose by 19% to VND138.26 trillion ($8.6 billion) at the end of last year, when deposits reached VND124 trillion.
Incombank has funded several projects in the telecom, energy and construction sectors, such as the project to launch Vietnam's first telecoms satellite and four power plant projects.
Last year's gross profit totaled VND780 billion, while Incombank only targeted VND650 billion in pre-tax profit.
Its bad debt ratio reportedly stands at 1.38%, the lowest level among existing state owned banks.

Source: Thanh Nien equity mekong capital vinacapital

Vietinbank seeks IPO advisors

The state-owned Industrial and Commercial Bank of Vietnam (Vietinbank/Incombank) will call for tenders from prospective advisers for its initial public offering due later this year, a senior official said Wednesday.
Deputy General Director Nguyen Viet Manh said the tender process would take place soon, without specifying a date. The IPO is planned for October.

According to a statement from the bank – commonly known as Vietinbank – seven international banks will take part in the tender process - Lehman Brothers, Merrill Lynch, JP Morgan, UBS, Morgan Stanley, Macquarie, and Daiwa Securities.

Manh said Vietinbank, which has a registered capital of VND10 trillion (US$625 million), was expected to list its shares on the country's stock market later this year.

He didn't give details on the bank's plans to sell shares to foreign investors. Vietnamese law allows foreigners to hold up to 30% in domestic banks.

Vietnam has five state-owned commercial banks of which Vietcombank has signed a contract with Credit Suisse to act as its financial advisor for its IPO, planned for the third quarter this year.

The Vietnamese government has said it wants the five banks to sell shares to foreign investors by 2010 to boost their competitiveness.

Source: Thanh Nien Equity Vietnam Mekong Capital

Incombank shares to go to bourse

Next week, the Vietnam Industrial and Commercial Bank (Incombank) will give bidding documents to a restricted number of bidders under the agreement of the Prime Minister, said the bank’s General Director Pham Huy Hung.

According to Mr Hung, Incombank plans to conduct initial public offering (IPO) in the fourth quarter of 2007 and list its shares on the stock market.

Seven of ten international bidders have been selected for the limited tender, which is scheduled to last till May 2007.

Incombank is speeding up its preparations for equitisation to become one of the first state-owned commercial banks to perform IPO and list shares on the stock market.

Incombank and Australia’s onQ on March 21 signed an agreement to issue the first pre-paid Visa cards in Vietnam, called Bopo. This kind of card works like a Visa credit card, allowing card owners to purchase goods, withdraw money from ATMs, and pay online.

Incombank plans to issue this kind of card in the third quarter of 2007; firstly, the pre-paid tourist Bopo to serve tourists.

Source: VNE

Incombank increased assets in 2006 and plans IPO for 4th quarter 2007

The Vietnamese state-owned Industrial and Commercial Bank (Incombank) is preparing to go public in the fourth quarter this year, its head said Thursday.

Pham Huy Hung, general director, said the government had approved an equitization plan, the first by a state-owned bank, submitted by the bank but declined to reveal further details.

He said merely the bank had hired Ernst & Young to audit its books.

Incombank has a chartered capital of 4 trillion VND (249mio US$) and the government plans to inject more funds to scale up its capital to 10 trillion VND (622mio US$) before the IPO.

It has assets of 138.3 trillion VND (8.6mio US$), a year-on-year jump of 18.8%, 136 branches and 145 transaction offices.

It made a profit last year of 780 billion VND (49mio US$), +3.4% and had reserves of 1.66 trillion VND (103mio US$).

It has deposits of nearly 124 trillion VND (7.7mio US$) and outstanding loans of 125 trillion VND (7.8mio US$).

The bank has managed to reduce its bad debts to 1.38% from 28% in 2000.

Source: Thanh Nien